Expects to complete Sovos Brands, Inc.
acquisition in March 2024
- Net Sales were $2.5 billion, decreasing 1% on both a reported
and organic basis. On a two-year-compound annual growth rate
(CAGR), net sales increased 5% and organic net sales increased 6%
due to favorable net price realization and continued brand
strength.
- Earnings Before Interest and Taxes (EBIT) were $317 million;
Adjusted EBIT was $364 million, an increase of 1%.
- Earnings Per Share (EPS) were $0.68; Adjusted EPS were $0.80,
comparable to the prior year.
- Reaffirms full-year fiscal 2024 guidance.
- Subject to the satisfaction or waiver of customary closing
conditions, Campbell expects to complete the acquisition of Sovos
Brands, Inc. (Sovos Brands) the week of March 11, 2024.
Campbell Soup Company (NYSE:CPB) today reported results
for its second-quarter fiscal 2024 ended January 28, 2024.
CEO Comments “We once again delivered on our commitments,
with a sequential improvement in volume trends and year-over-year
operating margin expansion in both our Meals & Beverages and
Snacks divisions,” said Campbell's President and CEO, Mark Clouse.
“We are excited about the anticipated completion of the acquisition
of Sovos Brands which will bring incremental growth to our Meals
& Beverages division and continue the transformation of our
highly advantaged portfolio.”
Three Months Ended
Six Months Ended
($ in millions, except per share)
January 28, 2024
January 29, 2023
% Change
January 28, 2024
January 29, 2023
% Change
Net Sales
As Reported (GAAP)
$2,456
$2,485
(1)%
$4,974
$5,060
(2)%
Organic
(1)%
(1)%
Earnings Before Interest and Taxes
(EBIT)
As Reported (GAAP)
$317
$350
(9)%
$675
$786
(14)%
Adjusted
$364
$362
1%
$771
$812
(5)%
Diluted Earnings Per Share
As Reported (GAAP)
$0.68
$0.77
(12)%
$1.46
$1.76
(17)%
Adjusted
$0.80
$0.80
—%
$1.71
$1.82
(6)%
Note: A detailed reconciliation of the
reported (GAAP) financial information to the adjusted financial
information is included at the end of this news release.
Items Impacting Comparability The table below presents a
summary of items impacting comparability in each period. A detailed
reconciliation of the reported (GAAP) financial information to the
adjusted information is included at the end of this news
release.
Diluted Earnings Per
Share
Three Months Ended
Six Months Ended
January 28, 2024
January 29, 2023
January 28, 2024
January 29, 2023
As Reported (GAAP)
$0.68
$0.77
$1.46
$1.76
Restructuring charges, implementation
costs and other related costs associated with cost savings
initiatives
$0.09
$0.03
$0.12
$0.04
Commodity mark-to-market adjustments
$(0.02)
$0.01
$0.02
$—
Accelerated amortization
$0.02
$—
$0.03
$—
Costs associated with pending
acquisition
$0.03
$—
$0.06
$—
Plum litigation expenses
$—
$—
$0.01
$—
Cybersecurity incident costs
$—
$—
$0.01
$—
Pension actuarial losses (gains)
$—
$(0.01)
$—
$0.02
Adjusted
$0.80
$0.80
$1.71
$1.82
Second-Quarter Results Net sales in the quarter decreased
1%. Organic net sales decreased 1% to $2.5 billion, following a 13%
increase in the prior year that reflected double-digit
inflation-driven net price realization. Although down 2% compared
to the prior year, volume / mix improved versus the first quarter
as expected and was partially offset by net price realization of
1%. On a two-year CAGR basis, reported and organic net sales grew
approximately 5% and 6%, respectively.
Gross profit increased to $776 million from $759 million. Gross
profit margin was 31.6% compared to 30.5%. Excluding items
impacting comparability, adjusted gross profit was $772 million
compared to $763 million in the prior year. Adjusted gross profit
margin increased 70 basis points to 31.4% driven by supply chain
productivity improvements, net price realization, the benefit from
cost savings initiatives and favorable volume / mix which combined
more than offset higher cost inflation and other supply chain
costs.
Marketing and selling expenses were comparable to the prior year
at $217 million and represented approximately 9% of net sales.
Higher selling expenses were offset by 6% lower advertising and
consumer promotion expense, driven by Meals & Beverages.
Administrative expenses increased 17% to $189 million. Excluding
items impacting comparability, adjusted administrative expenses
increased 1% to $159 million primarily due to higher general and
administrative costs and inflation, mostly offset by benefits from
cost savings initiatives.
Other expenses were $26 million compared to $0 million in the
prior year. Excluding items impacting comparability, adjusted other
expenses were $9 million compared to $6 million in the prior year
primarily due to lower benefits from pension and postretirement
income.
As reported EBIT decreased to $317 million from $350 million.
Excluding items impacting comparability, adjusted EBIT increased 1%
to $364 million primarily due to higher adjusted gross profit,
partially offset by higher adjusted other expenses, higher adjusted
research and development expenses and higher adjusted
administrative expenses.
Net interest expense was $46 million compared to $45 million.
The effective tax rate was 25.1% compared to 23.9%. Excluding items
impacting comparability, the adjusted effective tax rate increased
50 basis points to 24.5%.
As reported EPS were $0.68 per share compared to $0.77 per
share. Excluding items impacting comparability, adjusted EPS of
$0.80 per share were comparable to prior year reflecting a slight
increase in EBIT, and a reduction in the weighted average diluted
shares outstanding partially offset by a higher adjusted effective
tax rate.
First-Half Results Net sales decreased 2% and organic net
sales decreased 1% to $5.0 billion with unfavorable volume / mix
partially offset by the benefit of net price realization. On a
two-year CAGR basis, reported and organic net sales each grew
approximately 6%.
As reported EBIT decreased 14% to $675 million. Excluding items
impacting comparability, adjusted EBIT decreased 5% to $771 million
primarily due to higher adjusted marketing and selling expenses,
lower adjusted gross profit and higher adjusted other expenses.
Net interest expense was $94 million compared to $91 million.
The effective tax rate was 24.8% compared to 23.9%. Excluding items
impacting comparability, the adjusted effective tax rate increased
to 24.4% compared to 23.9% in the prior year.
As reported EPS increased to $1.46 per share compared to $1.76
per share. Excluding items impacting comparability, adjusted EPS
decreased $0.11, or 6%, to $1.71 per share primarily reflecting the
decrease in adjusted EBIT, higher net interest expense and a higher
adjusted effective tax rate, partially offset by a reduction in the
weighted average diluted shares outstanding.
Cash flow from operations was $684 million compared to $732
million primarily due to lower cash earnings. Capital expenditures
were $263 million compared to $155 million in the prior year. In
line with Campbell’s commitment to return value to its
shareholders, the company paid $224 million of cash dividends and
repurchased common stock of approximately $29 million. At the end
of the second quarter, the company had approximately $301 million
remaining under the current $500 million strategic share repurchase
program and approximately $75 million remaining under its $250
million anti-dilutive share repurchase program.
Cost Savings Program from Continuing Operations Through
the second quarter, Campbell has achieved $915 million of total
savings under its multi-year cost savings program, inclusive of
Snyder’s-Lance synergies. The company remains on track to deliver
savings of $1 billion by the end of fiscal 2025.
Full-Year Fiscal 2024 Guidance: Given the sequential
volume and margin improvement for its key brands and categories,
the company is reaffirming its full-year fiscal 2024 guidance
provided on August 31, 2023. Full year top-line growth rate is
currently tracking to the lower end of the net sales guidance
range, with possible upside should the pace of consumer recovery
accelerate in the second half of the year. The company continues to
expect sequential earnings and margin progress in the balance of
the fiscal year reflecting a moderating inflationary environment
and on-going productivity improvements.
Other additional guidance assumptions can be found in the
accompanying investor presentation available at
investor.campbellsoupcompany.com/events-and-presentations.
The pending acquisition of Sovos Brands is currently expected to
close the week of March 11, 2024 and is not included in Campbell's
current fiscal 2024 outlook. After the transaction closes, the
company expects to update guidance for the combined business with
third-quarter earnings.
The full-year fiscal 2024 guidance is set forth in the table
below:
FY2023 Results
FY2024 Guidance
($ in millions, except per share)
Net Sales
$9,357
(0.5)% to +1.5%
Organic Net Sales1
$9,306*
0% to +2%
Adjusted EBIT2
$1,367*
+3% to +5%
Adjusted EPS2
$3.00*
+3% to +5%
$3.09 to $3.15
* Adjusted - refer to the detailed
reconciliation of the reported (GAAP) financial information to the
adjusted financial information at the end of this news release.
1 Growth rate adjusted for the Emerald
nuts business, which was divested on May 30, 2023.
2 Adjusted EBIT in fiscal 2023 included
approximately $14 million and adjusted EPS included approximately
$0.04 of litigation expenses related to the Plum baby food and
snacks business (Plum), which was divested on May 3, 2021. We are
excluding these expenses from our fiscal 2024 adjusted EBIT and
adjusted EPS and thereafter as we do not believe that these
expenses reflect our underlying operating performance.
Note: A non-GAAP reconciliation is not
provided for fiscal 2024 guidance as the company is unable to
reasonably estimate the full-year financial impact of items such as
actuarial gains or losses on pension and postretirement plans
because these impacts are dependent on future changes in market
conditions. The inability to predict the amount and timing of these
future items makes a detailed reconciliation of these
forward-looking financial measures impracticable.
Segment Operating Review An analysis of net sales and
operating earnings by reportable segment follows:
Three
Months Ended January 28, 2024
($ in millions)
Meals & Beverages
Snacks
Total*
Net Sales, as Reported
$1,382
$1,074
$2,456
Volume/Mix
(2)%
(2)%
(2)%
Net Price Realization
—%
3%
1%
Organic Net Sales
(2)%
1%
(1)%
Currency
—%
—%
—%
Divestiture1
—%
(1)%
(1)%
% Change vs. Prior Year
(2)%
—%
(1)%
Segment Operating Earnings
$247
$161
% Change vs. Prior Year
(1)%
7%
*Numbers do not add due to rounding.
1 Reflects the loss of net sales
associated with the divestiture of the Emerald nuts business, which
was completed on May 30, 2023.
Note: A detailed reconciliation of the
reported (GAAP) net sales to organic net sales is included at the
end of this news release.
Six
Months Ended January 28, 2024
($ in millions)
Meals & Beverages
Snacks
Total
Net Sales, as Reported
$2,786
$2,188
$4,974
Volume/Mix
(4)%
(3)%
(3)%
Net Price Realization
1%
4%
2%
Organic Net Sales
(3)%
1%
(1)%
Currency
—%
—%
—%
Divestiture1
—%
(1)%
(1)%
% Change vs. Prior Year
(3)%
—%
(2)%
Segment Operating Earnings
$534
$322
% Change vs. Prior Year
(8)%
6%
1 Reflects the loss of net sales
associated with the divestiture of the Emerald nuts business, which
was completed on May 30, 2023.
Note: A detailed reconciliation of the
reported (GAAP) net sales to organic net sales is included at the
end of this news release.
Meals & Beverages Net sales in the quarter, both
reported and organic, decreased 2% as declines in U.S. retail
products, primarily declines in U.S. soup, beverages and Pace
Mexican sauces, were partially offset by gains in Canada and
foodservice. Net sales were impacted by unfavorable volume / mix
with neutral net price realization. Following a 7% increase in the
prior year, sales of U.S. soup decreased 3% primarily due to
decreases in ready-to-serve soups and condensed soups, partially
offset by an increase in broth. On a two-year CAGR basis, Meals
& Beverages reported and organic net sales each grew
approximately 4%.
Operating earnings in the quarter decreased 1% primarily due to
lower gross profit, partially offset by lower marketing and selling
expenses. Gross profit margin decreased due to higher cost
inflation and other supply chain costs, partially offset by supply
chain productivity improvements, the benefit from cost savings
initiatives, favorable net price realization and favorable volume /
mix.
Snacks Net sales in the quarter were flat. Excluding the
impact from the divestiture of the Emerald nuts business, organic
net sales increased 1% driven by sales of its 8 power brands, which
were up 4%, partially offset by declines in third-party partner
brands. Sales growth was driven by increases in cookies and
crackers, primarily Goldfish crackers and Lance sandwich crackers,
and in salty snacks. Within salty snacks, increases primarily in
Kettle Brand and Cape Cod potato chips more than offset declines in
Pop Secret popcorn and Late July snacks. Sales benefited from net
price realization of 3%, partially offset by unfavorable volume /
mix of 2%. On a two-year CAGR basis, Snacks net sales, both
reported and organic, grew approximately 7% and 8%,
respectively.
Operating earnings in the quarter increased 7% primarily due to
higher gross profit, partially offset by planned higher marketing
and selling expenses. Gross profit margin increased due to
favorable net price realization, supply chain productivity
improvements, the benefit from cost savings initiatives and
favorable volume / mix more than offsetting higher cost inflation
and other supply chain costs.
Corporate Corporate expenses were $89 million in the
second quarter of fiscal 2024 compared to $40 million in the prior
year.
Corporate expense in the current quarter included the
following:
- $34 million of costs related to cost savings initiatives;
- $10 million of costs associated with the pending acquisition of
Sovos Brands;
- $7 million of accelerated amortization;
- $1 million of Plum litigation expenses; and
- $7 million of unrealized mark-to-market gains on outstanding
undesignated commodity hedges.
Corporate expense in the second quarter of fiscal 2023
included:
- $5 million of costs related to cost savings initiatives;
- $4 million of unrealized mark-to-market losses on outstanding
undesignated commodity hedges; and
- $6 million of pension actuarial gains.
After factoring in these items, the remaining increase in
Corporate expense was primarily changes in pension and
postretirement benefit income.
Conference Call and Webcast Campbell will host a
conference call to discuss these results today at 8:00 a.m. Eastern
Time. Participants calling from the U.S. may dial in using the
toll-free phone number (888) 596-4144. Participants calling from
outside the U.S. may dial in using phone number +1 (647) 495-7514.
The conference access code is 2518868. In addition to dial-in,
access to a live listen-only audio webcast and accompanying slide
presentation, as well as a replay of the webcast, will be available
at investor.campbellsoupcompany.com/events-and-presentations.
Reportable Segments Campbell Soup Company earnings
results are reported as follows:
Meals & Beverages, which consists
of our soup, simple meals and beverage products in retail and
foodservice in U.S. and Canada. The segment includes the following
products: Campbell’s condensed and ready-to-serve soups; Swanson
broth and stocks; Pacific Foods broth, soups and non-dairy
beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s
gravies, pasta, beans and dinner sauces; Swanson canned poultry; V8
juices and beverages; and Campbell’s tomato juice. The segment also
includes snacking products in foodservice and Canada.
Snacks, which consists of Pepperidge
Farm cookies*, crackers, fresh bakery and frozen products,
including Goldfish crackers*, Snyder’s of Hanover pretzels*, Lance
sandwich crackers*, Cape Cod potato chips*, Kettle Brand potato
chips*, Late July snacks*, Snack Factory pretzel crisps*, Pop
Secret popcorn, and other snacking products in retail in the U.S.
We refer to the * brands as our "power brands." The segment also
includes the retail business in Latin America. The segment included
the results of our Emerald nuts business, which was sold on May 30,
2023.
About Campbell For more than 150 years, Campbell
(NYSE:CPB) has been connecting people through food they love.
Generations of consumers have trusted us to provide delicious and
affordable food and beverages. Headquartered in Camden, N.J. since
1869, the company generated fiscal 2023 net sales of $9.4 billion.
Our portfolio includes iconic brands such as Campbell’s, Cape Cod,
Goldfish, Kettle Brand, Lance, Late July, Milano, Pace, Pacific
Foods, Pepperidge Farm, Prego, Snyder’s of Hanover, Swanson and V8.
Campbell has a heritage of giving back and acting as a good steward
of the environment. The company is a member of the Standard &
Poor's 500 as well as the FTSE4Good and Bloomberg Gender-Equality
Indices. For more information, visit
www.campbellsoupcompany.com.
Forward-Looking Statements This release contains
“forward-looking statements” that reflect the company’s current
expectations about the impact of its future plans and performance
on the company’s business or financial results. These
forward-looking statements, including any statements made regarding
sales, EBIT and EPS guidance, rely on a number of assumptions and
estimates that could be inaccurate, and which are subject to risks
and uncertainties. The factors that could cause the company’s
actual results to vary materially from those anticipated or
expressed in any forward-looking statement include: the conditions
to the completion of the Sovos Brands, Inc. (“Sovos Brands”)
transaction may not be satisfied or that the closing of the
proposed transaction might not otherwise occur; long-term financing
for the Sovos Brands transaction may not be obtained on favorable
terms, or at all; the risk that the cost savings and any other
synergies from the Sovos Brands transaction may not be fully
realized or may take longer or cost more to be realized than
expected, including that the Sovos Brands transaction may not be
accretive within the expected timeframe or the extent anticipated;
completing the Sovos Brands transaction may distract our management
from other important matters; the risks related to the availability
of, and cost inflation in, supply chain inputs, including labor,
raw materials, commodities, packaging and transportation; the
company’s ability to execute on and realize the expected benefits
from its strategy, including growing sales in snacks and
growing/maintaining its market share position in soup; the impact
of strong competitive responses to the company’s efforts to
leverage its brand power with product innovation, promotional
programs and new advertising; the risks associated with trade and
consumer acceptance of product improvements, shelving initiatives,
new products and pricing and promotional strategies; the ability to
realize projected cost savings and benefits from cost savings
initiatives and the integration of recent acquisitions; disruptions
in or inefficiencies to the company’s supply chain and/or
operations, including reliance on key supplier relationships; the
risks related to the effectiveness of the company's hedging
activities and the company's ability to respond to volatility in
commodity prices; the company’s ability to manage changes to its
organizational structure and/or business processes, including
selling, distribution, manufacturing and information management
systems or processes; changes in consumer demand for the company’s
products and favorable perception of the company’s brands; changing
inventory management practices by certain of the company’s key
customers; a changing customer landscape, with value and e-commerce
retailers expanding their market presence, while certain of the
company’s key customers maintain significance to the company’s
business; product quality and safety issues, including recalls and
product liabilities; the possible disruption to the independent
contractor distribution models used by certain of the company’s
businesses, including as a result of litigation or regulatory
actions affecting their independent contractor classification; the
uncertainties of litigation and regulatory actions against the
company; the costs, disruption and diversion of management’s
attention associated with activist investors; a disruption, failure
or security breach of the company’s or the company's vendors'
information technology systems, including ransomware attacks;
impairment to goodwill or other intangible assets; the company’s
ability to protect its intellectual property rights; increased
liabilities and costs related to the company’s defined benefit
pension plans; the company’s ability to attract and retain key
talent; goals and initiatives related to, and the impacts of,
climate change, including weather-related events; negative changes
and volatility in financial and credit markets, deteriorating
economic conditions and other external factors, including changes
in laws and regulations; unforeseen business disruptions or other
impacts due to political instability, civil disobedience,
terrorism, armed hostilities (including the ongoing conflict
between Russia and Ukraine and in Israel and Gaza), extreme weather
conditions, natural disasters, pandemics or other outbreaks of
disease or other calamities; and other factors described in the
company’s most recent Form 10-K and subsequent Securities and
Exchange Commission filings. The company disclaims any obligation
or intent to update the forward-looking statements in order to
reflect events or circumstances after the date of this release.
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF
EARNINGS (unaudited)
(millions, except per share
amounts)
Three Months Ended
January 28, 2024
January 29, 2023
Net sales
$
2,456
$
2,485
Costs and expenses
Cost of products sold
1,680
1,726
Marketing and selling expenses
217
217
Administrative expenses
189
162
Research and development expenses
25
21
Other expenses / (income)
26
—
Restructuring charges
2
9
Total costs and expenses
2,139
2,135
Earnings before interest and taxes
317
350
Interest, net
46
45
Earnings before taxes
271
305
Taxes on earnings
68
73
Net earnings
203
232
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
203
$
232
Per share - basic
Net earnings attributable to Campbell Soup
Company
$
.68
$
.78
Weighted average shares outstanding -
basic
298
299
Per share - assuming dilution
Net earnings attributable to Campbell Soup
Company
$
.68
$
.77
Weighted average shares outstanding -
assuming dilution
299
301
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF
EARNINGS (unaudited)
(millions, except per share
amounts)
Six Months Ended
January 28, 2024
January 29, 2023
Net sales
$
4,974
$
5,060
Costs and expenses
Cost of products sold
3,410
3,467
Marketing and selling expenses
439
418
Administrative expenses
347
320
Research and development expenses
49
42
Other expenses / (income)
50
18
Restructuring charges
4
9
Total costs and expenses
4,299
4,274
Earnings before interest and taxes
675
786
Interest, net
94
91
Earnings before taxes
581
695
Taxes on earnings
144
166
Net earnings
437
529
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
437
$
529
Per share - basic
Net earnings attributable to Campbell Soup
Company
$
1.47
$
1.77
Weighted average shares outstanding -
basic
298
299
Per share - assuming dilution
Net earnings attributable to Campbell Soup
Company
$
1.46
$
1.76
Weighted average shares outstanding -
assuming dilution
299
301
CAMPBELL SOUP COMPANY
CONSOLIDATED SUPPLEMENTAL
SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share
amounts)
Three Months Ended
January 28, 2024
January 29, 2023
Percent Change
Sales
Contributions:
Meals & Beverages
$
1,382
$
1,408
(2)%
Snacks
1,074
1,077
—%
Total sales
$
2,456
$
2,485
(1)%
Earnings
Contributions:
Meals & Beverages
$
247
$
249
(1)%
Snacks
161
150
7%
Total operating earnings
408
399
2%
Corporate income (expense)
(89
)
(40
)
Restructuring charges
(2
)
(9
)
Earnings before interest and taxes
317
350
(9)%
Interest, net
46
45
Taxes on earnings
68
73
Net earnings
203
232
(13)%
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
203
$
232
(13)%
Per share - assuming dilution
Net earnings attributable to Campbell Soup
Company
$
.68
$
.77
(12)%
CAMPBELL SOUP COMPANY
CONSOLIDATED SUPPLEMENTAL
SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share
amounts)
Six Months Ended
January 28, 2024
January 29, 2023
Percent
Change
Sales
Contributions:
Meals & Beverages
$
2,786
$
2,863
(3)%
Snacks
2,188
2,197
—%
Total sales
$
4,974
$
5,060
(2)%
Earnings
Contributions:
Meals & Beverages
$
534
$
580
(8)%
Snacks
322
303
6%
Total operating earnings
856
883
(3)%
Corporate income (expense)
(177
)
(88
)
Restructuring charges
(4
)
(9
)
Earnings before interest and taxes
675
786
(14)%
Interest, net
94
91
Taxes on earnings
144
166
Net earnings
437
529
(17)%
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
437
$
529
(17)%
Per share - assuming dilution
Net earnings attributable to Campbell Soup
Company
$
1.46
$
1.76
(17)%
CAMPBELL SOUP COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited)
(millions)
January 28, 2024
January 29, 2023
Current assets
$
2,070
$
2,087
Plant assets, net
2,470
2,318
Intangible assets, net
7,071
7,152
Other assets
495
410
Total assets
$
12,106
$
11,967
Current liabilities
$
2,056
$
2,699
Long-term debt
4,506
3,992
Other liabilities
1,693
1,675
Total equity
3,851
3,601
Total liabilities and equity
$
12,106
$
11,967
Total debt
$
4,520
$
4,570
Total cash and cash equivalents
$
169
$
158
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited)
(millions)
Six Months Ended
January 28, 2024
January 29, 2023
Cash flows from operating activities:
Net earnings
$
437
$
529
Adjustments to reconcile net earnings to
operating cash flow
Restructuring charges
4
9
Stock-based compensation
36
31
Pension and postretirement benefit
expense
3
3
Depreciation and amortization
192
176
Deferred income taxes
6
2
Other
76
51
Changes in working capital
Accounts receivable
(116
)
(63
)
Inventories
102
(6
)
Other current assets
(22
)
(12
)
Accounts payable and accrued
liabilities
(17
)
38
Other
(17
)
(26
)
Net cash provided by operating
activities
684
732
Cash flows from investing activities:
Purchases of plant assets
(263
)
(155
)
Purchases of route businesses
(6
)
(3
)
Sales of route businesses
13
—
Net cash used in investing activities
(256
)
(158
)
Cash flows from financing activities:
Short-term borrowings, including
commercial paper
1,416
1,389
Short-term repayments, including
commercial paper
(1,596
)
(1,626
)
Dividends paid
(224
)
(226
)
Treasury stock purchases
(29
)
(66
)
Treasury stock issuances
—
22
Payments related to tax withholding for
stock-based compensation
(14
)
(18
)
Other
(1
)
—
Net cash used in financing activities
(448
)
(525
)
Effect of exchange rate changes on
cash
—
—
Net change in cash and cash
equivalents
(20
)
49
Cash and cash equivalents — beginning of
period
189
109
Cash and cash equivalents — end of
period
$
169
$
158
Reconciliation of GAAP to Non-GAAP Financial
Measures Second Quarter Ended January 28, 2024
Campbell Soup Company (the "company") uses certain non-GAAP
financial measures as defined by the Securities and Exchange
Commission in certain communications. These non-GAAP financial
measures are measures of performance not defined by accounting
principles generally accepted in the United States and should be
considered in addition to, not in lieu of, GAAP reported measures.
Management believes that also presenting certain non-GAAP financial
measures provides additional information to facilitate comparison
of the company's historical operating results and trends in its
underlying operating results, and provides transparency on how the
company evaluates its business. Management uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the company's performance. Management
considers quantitative and qualitative factors in assessing whether
to adjust for the impact of items that may be significant or that
could affect an understanding of the company’s performance and
trends in its underlying operating results. The adjustments on
earnings may include but are not limited to items such as: unusual
or non-recurring gains or charges; restructuring charges and
related costs; actuarial gains or losses on pension and
postretirement plans; unrealized mark-to-market gains and losses on
outstanding undesignated commodity hedges; gains or losses on the
extinguishment of debt; gains or losses on divestitures; costs
associated with acquisitions; impairment charges or accelerated
amortization; certain litigation expenses; and costs related to a
cybersecurity incident. Depending upon facts or circumstances,
management may change these adjustments. When these adjustments
change, the company will provide updated definitions of its
non-GAAP financial measures. When items no longer impact the
company’s current or future presentation of non-GAAP operating
results, the company will remove these items from its non-GAAP
definitions.
Organic Net Sales
Organic net sales are net sales excluding the impact of
currency, acquisitions and divestitures. Management believes that
excluding these items, which are not part of the ongoing business,
improves the comparability of year-to-year results. A
reconciliation of net sales as reported to organic net sales
follows.
Three Months Ended
January 28, 2024
January 29, 2023
% Change
(millions)
Net Sales, as
Reported
Impact of Currency
Organic Net Sales
Net Sales, as
Reported
Impact of Divestiture
Organic Net Sales
Net Sales, as
Reported
Organic Net Sales
Meals & Beverages
$
1,382
$
—
$
1,382
$
1,408
$
—
$
1,408
(2
)%
(2
)%
Snacks
1,074
—
1,074
1,077
(13
)
1,064
—
%
1
%
Total Net Sales
$
2,456
$
—
$
2,456
$
2,485
$
(13
)
$
2,472
(1
)%
(1
)%
Six Months Ended
January 28, 2024
January 29, 2023
% Change
(millions)
Net Sales, as
Reported
Impact of Currency
Organic Net Sales
Net Sales, as
Reported
Impact of Divestiture
Organic Net Sales
Net Sales, as
Reported
Organic Net Sales
Meals & Beverages
$
2,786
$
3
$
2,789
$
2,863
$
—
$
2,863
(3
)%
(3
)%
Snacks
2,188
(1
)
2,187
2,197
(30
)
2,167
—
%
1
%
Total Net Sales
$
4,974
$
2
$
4,976
$
5,060
$
(30
)
$
5,030
(2
)%
(1
)%
Three Months Ended
January 28, 2024
January 30, 2022
Two-Year CAGR
(millions)
Net Sales, as
Reported
Impact of Currency
Organic Net Sales
Net Sales, as
Reported
Impact of Divestiture
Organic Net Sales
Net Sales, as
Reported
Organic Net Sales
Meals & Beverages
$
1,382
$
10
$
1,392
$
1,275
$
—
$
1,275
4
%
4
%
Snacks
1,074
(1
)
1,073
934
(13
)
921
7
%
8
%
Total Net Sales
$
2,456
$
9
$
2,465
$
2,209
$
(13
)
$
2,196
5
%
6
%
Six Months Ended
January 28, 2024
January 30, 2022
Two-Year CAGR
(millions)
Net Sales, as
Reported
Impact of Currency
Organic Net Sales
Net Sales, as
Reported
Impact of Divestiture
Organic Net Sales
Net Sales, as
Reported
Organic Net Sales
Meals & Beverages
$
2,786
$
20
$
2,806
$
2,541
$
—
$
2,541
5
%
5
%
Snacks
2,188
(2
)
2,186
1,904
(32
)
1,872
7
%
8
%
Total Net Sales
$
4,974
$
18
$
4,992
$
4,445
$
(32
)
$
4,413
6
%
6
%
Three Months Ended
January 29, 2023
January 30, 2022
% Change
(millions)
Net Sales, as
Reported
Impact of Currency
Organic Net Sales
Net Sales, as
Reported
Net Sales, as
Reported
Organic Net Sales
Total Net Sales
$
2,485
$
8
$
2,493
$
2,209
12
%
13
%
Year Ended
July 30, 2023
(millions)
Net Sales, as
Reported
Impact of Divestiture
Organic Net Sales for
FY 2024 Guidance
Meals & Beverages
$
4,907
$
—
$
4,907
Snacks
4,450
(51
)
4,399
Total Net Sales
$
9,357
$
(51
)
$
9,306
Items Impacting Earnings
Adjusted Net earnings are net earnings excluding the impact of
restructuring charges and related costs, unrealized mark-to-market
gains or losses on outstanding undesignated commodity hedges,
accelerated amortization, costs associated with acquisitions,
certain litigation expenses, costs related to a cybersecurity
incident, actuarial gains or losses on pension and postretirement
plans, and gains or losses on divestitures. Management believes
that financial information excluding certain items that are not
considered to reflect the ongoing operating results, such as those
listed below, improves the comparability of year-to-year results.
Consequently, management believes that investors may be able to
better understand its results excluding these items.
The following items impacted earnings:
(1)
The company has implemented several cost
savings initiatives in recent years.
In the second quarter of fiscal 2024, the
company recorded Restructuring charges of $2 million and
implementation costs and other related costs of $29 million in
Administrative expenses, $3 million in Cost of products sold, $1
million in Marketing and selling expenses and $1 million in
Research and development expenses (aggregate impact of $27 million
after tax, or $.09 per share) related to these initiatives. In the
second quarter of fiscal 2023, the company recorded Restructuring
charges of $9 million and implementation costs and other related
costs of $5 million in Administrative expenses (aggregate impact of
$10 million after tax, or $.03 per share) related to these
initiatives. In the six-month period of fiscal 2024, the company
recorded Restructuring charges of $4 million and implementation
costs and other related costs of $34 million in Administrative
expenses, $6 million in Cost of products sold, $3 million in
Marketing and selling expenses and $2 million in Research and
development expenses (aggregate impact of $37 million after tax, or
$.12 per share) related to these initiatives. In the six-month
period of fiscal 2023, the company recorded Restructuring charges
of $9 million and implementation costs and other related costs of
$8 million in Administrative expenses (aggregate impact of $13
million after tax, or $.04 per share) related to these initiatives.
For the year ended July 30, 2023, the company recorded
Restructuring charges of $16 million and implementation costs and
other related costs of $24 million in Administrative expenses, $18
million in Cost of products sold, $5 million in Marketing and
selling expenses and $3 million in Research and development
expenses (aggregate impact of $50 million after tax, or $.17 per
share) related to these initiatives.
(2)
In the second quarter of fiscal 2024, the
company recognized gains in Cost of products sold of $7 million ($5
million after tax, or $.02 per share) associated with unrealized
mark-to-market adjustments on outstanding undesignated commodity
hedges. In the second quarter of fiscal 2023, the company
recognized losses in Cost of products sold of $4 million ($3
million after tax, or $.01 per share) associated with unrealized
mark-to-market adjustments on outstanding undesignated commodity
hedges. In the six-month period of fiscal 2024, the company
recognized losses in Cost of products sold of $8 million ($6
million after tax, or $.02 per share) associated with unrealized
mark-to-market adjustments on outstanding undesignated commodity
hedges. For the year ended July 30, 2023, the company recognized
gains in Cost of products sold of $21 million ($16 million after
tax, or $.05 per share) associated with unrealized mark-to-market
adjustments on outstanding undesignated commodity hedges.
(3)
In the second quarter of fiscal 2024, the
company recorded accelerated amortization expense in Other expenses
/ (income) of $7 million ($5 million after tax, or $.02 per share)
related to customer relationship intangible assets due to the loss
of certain contract manufacturing customers, which began in the
fourth quarter of fiscal 2023. In the six-month period of fiscal
2024, the company recorded accelerated amortization expense in
Other expenses / (income) of $14 million ($10 million after tax, or
$.03 per share) related to customer relationship intangible assets.
For the year ended July 30, 2023, the company recorded accelerated
amortization expense in Other expenses / (income) of $7 million ($5
million after tax, or $.02 per share) related to customer
relationship intangible assets.
(4)
In the first quarter of fiscal 2024, the
company announced its intent to acquire Sovos Brands, Inc. In the
second quarter of fiscal 2024, the company incurred costs in Other
expenses / (income) of $10 million ($9 million after tax, or $.03
per share) associated with the pending acquisition. In the
six-month period of fiscal 2024, the company incurred costs in
Other expenses (income) of $19 million ($17 million after tax, or
$.06 per share) associated with the pending acquisition. For the
year ended July 30, 2023, the company incurred costs in Other
expenses / (income) of $5 million ($4 million after tax, or $.01
per share) associated with the pending acquisition.
(5)
In the second quarter of fiscal 2024, the
company recorded pre- and after-tax litigation expenses in
Administrative expenses of $1 million related to the Plum baby food
and snacks business (Plum), which was divested on May 3, 2021. In
the six-month period of fiscal 2024, the company recorded pre- and
after-tax litigation expenses in Administrative expenses of $3
million ($.01 per share) related to Plum.
(6)
In the six-month period of fiscal 2024,
the company recorded costs of $2 million in Cost of products sold
and $1 million in Administrative expenses (aggregate impact of $2
million after tax, or $.01 per share) related to a cybersecurity
incident that was identified in the fourth quarter of fiscal
2023.
(7)
In the second quarter of fiscal 2023, the
company recognized actuarial gains in Other expenses / (income) of
$6 million ($4 million after tax, or $.01 per share). In the
six-month period of fiscal 2023, the company recognized actuarial
losses in Other expenses / (income) of $9 million ($7 million after
tax, or $.02 per share). The actuarial gains and losses related to
interim remeasurements of certain U.S. pension plans due to lump
sum distributions that exceeded or were expected to exceed service
and interest costs resulting in settlement accounting for the
plans. For the year ended July 30, 2023, the company recognized
actuarial gains on pension and postretirement plans in Other
expenses / (income) of $15 million ($11 million after tax, or $.04
per share).
(8)
For the year ended July 30, 2023, the
company recorded a pre- and after-tax loss in Other expenses /
(income) of $13 million ($.04 per share) on the sale of its Emerald
nuts business.
The following tables reconcile financial information, presented
in accordance with GAAP, to financial information excluding certain
items:
Three Months Ended
January 28, 2024
January 29, 2023
(millions, except per share amounts)
As reported
Adjustments(a)
Adjusted
As reported
Adjustments(a)
Adjusted
Adjusted Percent
Change
Gross profit
$
776
$
(4
)
$
772
$
759
$
4
$
763
1%
Gross profit margin
31.6
%
31.4
%
30.5
%
30.7
%
70 pts
Marketing and selling expenses
$
217
$
(1
)
$
216
$
217
$
—
$
217
—%
Administrative expenses
$
189
$
(30
)
$
159
$
162
$
(5
)
$
157
1%
Research and development expenses
$
25
$
(1
)
$
24
$
21
$
—
$
21
Other expenses / (income)
$
26
$
(17
)
$
9
$
—
$
6
$
6
Restructuring charges
$
2
$
(2
)
$
—
$
9
$
(9
)
$
—
Earnings before interest and taxes
$
317
$
47
$
364
$
350
$
12
$
362
1%
Interest, net
46
—
46
45
—
45
2%
Earnings before taxes
$
271
$
47
$
318
$
305
$
12
$
317
Taxes
68
10
78
73
3
76
Effective income tax rate
25.1
%
24.5
%
23.9
%
24.0
%
50 pts
Net earnings attributable to Campbell Soup
Company
$
203
$
37
$
240
$
232
$
9
$
241
—%
Diluted net earnings per share
attributable to Campbell Soup Company
$
.68
$
.12
$
.80
$
.77
$
.03
$
.80
—%
(a) See following tables for additional
information.
Three Months Ended
January 28, 2024
(millions, except per share amounts)
Restructuring charges,
implementation costs and other related costs (1)
Commodity mark-to-market
(2)
Accelerated amortization
(3)
Costs associated with pending
acquisition (4)
Plum litigation expenses
(5)
Adjustments
Gross profit
$
3
$
(7
)
$
—
$
—
$
—
$
(4
)
Marketing and selling expenses
(1
)
—
—
—
—
(1
)
Administrative expenses
(29
)
—
—
—
(1
)
(30
)
Research and development expenses
(1
)
—
—
—
—
(1
)
Other expenses / (income)
—
—
(7
)
(10
)
—
(17
)
Restructuring charges
(2
)
—
—
—
—
(2
)
Earnings before interest and taxes
$
36
$
(7
)
$
7
$
10
$
1
$
47
Interest, net
—
—
—
—
—
—
Earnings before taxes
$
36
$
(7
)
$
7
$
10
$
1
$
47
Taxes
9
(2
)
2
1
—
10
Net earnings attributable to Campbell Soup
Company
$
27
$
(5
)
$
5
$
9
$
1
$
37
Diluted net earnings per share
attributable to Campbell Soup Company
$
.09
$
(.02
)
$
.02
$
.03
$
—
$
.12
Three Months Ended
January 29, 2023
(millions, except per share amounts)
Restructuring charges,
implementation costs and other related costs
(1)
Commodity
mark-to-market
(2)
Pension and postretirement
adjustments
(7)
Adjustments
Gross profit
$
—
$
4
$
—
$
4
Administrative expenses
(5
)
—
—
(5
)
Other expenses / (income)
—
—
6
6
Restructuring charges
(9
)
—
—
(9
)
Earnings before interest and taxes
$
14
$
4
$
(6
)
$
12
Interest, net
—
—
—
—
Earnings before taxes
$
14
$
4
$
(6
)
$
12
Taxes
4
1
(2
)
3
Net earnings attributable to Campbell Soup
Company
$
10
$
3
$
(4
)
$
9
Diluted net earnings per share
attributable to Campbell Soup Company
$
.03
$
.01
$
(.01
)
$
.03
Six Months Ended
January 28, 2024
January 29, 2023
(millions, except per share amounts)
As reported
Adjustments(a)
Adjusted
As reported
Adjustments(a)
Adjusted
Adjusted Percent
Change
Gross profit
$
1,564
$
16
$
1,580
$
1,593
$
—
$
1,593
(1
)%
Gross profit margin
31.4
%
31.8
%
31.5
%
31.5
%
30 pts
Marketing and selling expenses
$
439
$
(3
)
$
436
$
418
$
—
$
418
4
%
Administrative expenses
$
347
$
(38
)
$
309
$
320
$
(8
)
$
312
(1
)%
Research and development expenses
$
49
$
(2
)
$
47
$
42
$
—
$
42
Other expenses / (income)
$
50
$
(33
)
$
17
$
18
$
(9
)
$
9
Restructuring charges
$
4
$
(4
)
$
—
$
9
$
(9
)
$
—
Earnings before interest and taxes
$
675
$
96
$
771
$
786
$
26
$
812
(5
)%
Interest, net
94
—
94
91
—
91
3
%
Earnings before taxes
$
581
$
96
$
677
$
695
$
26
$
721
Taxes
144
21
165
166
6
172
Effective income tax rate
24.8
%
24.4
%
23.9
%
23.9
%
50 pts
Net earnings attributable to Campbell Soup
Company
$
437
$
75
$
512
$
529
$
20
$
549
(7
)%
Diluted net earnings per share
attributable to Campbell Soup Company*
$
1.46
$
.25
$
1.71
$
1.76
$
.07
$
1.82
(6
)%
(a) See following tables for additional
information.
*The sum of individual per share amounts may not add due to
rounding.
Six Months Ended
January 28, 2024
(millions, except per share amounts)
Restructuring charges,
implementation costs and other related costs
(1)
Commodity
mark-to-market
(2)
Accelerated amortization
(3)
Costs associated with pending
acquisition
(4)
Plum litigation
expenses
(5)
Cybersecurity incident
costs
(6)
Adjustments
Gross profit
$
6
$
8
$
—
$
—
$
—
$
2
$
16
Marketing and selling expenses
(3
)
—
—
—
—
—
(3
)
Administrative expenses
(34
)
—
—
—
(3
)
(1
)
(38
)
Research and development expenses
(2
)
—
—
—
—
—
(2
)
Other expenses / (income)
—
—
(14
)
(19
)
—
—
(33
)
Restructuring charges
(4
)
—
—
—
—
—
(4
)
Earnings before interest and taxes
$
49
$
8
$
14
$
19
$
3
$
3
$
96
Interest, net
—
—
—
—
—
—
—
Earnings before taxes
$
49
$
8
$
14
$
19
$
3
$
3
$
96
Taxes
12
2
4
2
—
1
21
Net earnings attributable to Campbell Soup
Company
$
37
$
6
$
10
$
17
$
3
$
2
$
75
Diluted net earnings per share
attributable to Campbell Soup Company
$
.12
$
.02
$
.03
$
.06
$
.01
$
.01
$
.25
Six Months Ended
January 29, 2023
(millions, except per share amounts)
Restructuring charges,
implementation costs and other related costs
(1)
Pension and postretirement
adjustments
(7)
Adjustments
Administrative expenses
$
(8
)
$
—
$
(8
)
Other expenses / (income)
—
(9
)
(9
)
Restructuring charges
(9
)
—
(9
)
Earnings before interest and taxes
$
17
$
9
$
26
Interest, net
—
—
—
Earnings before taxes
$
17
$
9
$
26
Taxes
4
2
6
Net earnings attributable to Campbell Soup
Company
$
13
$
7
$
20
Diluted net earnings per share
attributable to Campbell Soup Company*
$
.04
$
.02
$
.07
*The sum of individual per share amounts
may not add due to rounding.
(millions, except per share amounts)
Year Ended July 30,
2023
Gross profit, as reported
$
2,917
Add: Restructuring charges, implementation
costs and other related costs (1)
18
Deduct: Commodity mark-to-market
adjustments (2)
(21
)
Adjusted Gross profit
$
2,914
Adjusted Gross profit margin
31.1
%
Earnings before interest and taxes, as
reported
$
1,312
Add: Restructuring charges, implementation
costs and other related costs (1)
66
Deduct: Commodity mark-to-market
adjustments (2)
(21
)
Add: Accelerated amortization (3)
7
Add: Costs associated with pending
acquisition (4)
5
Deduct: Pension and postretirement
adjustments (7)
(15
)
Add: Divestiture (8)
13
Adjusted Earnings before interest and
taxes
$
1,367
Interest, net, as reported
$
184
Adjusted Earnings before taxes
$
1,183
Taxes on earnings, as reported
$
270
Add: Tax benefit from restructuring
charges, implementation costs and other related costs (1)
16
Deduct: Tax expense from commodity
mark-to-market adjustments (2)
(5
)
Add: Tax benefit from accelerated
amortization (3)
2
Add: Tax benefit from costs associated
with pending acquisition (4)
1
Deduct: Tax expense from pension and
postretirement adjustments (7)
(4
)
Adjusted Taxes on earnings
$
280
Adjusted effective income tax
rate
23.7
%
Net earnings attributable to Campbell
Soup Company, as reported
$
858
Add: Net adjustment from restructuring
charges, implementation costs and other related costs (1)
50
Deduct: Net adjustment from commodity
mark-to-market adjustments (2)
(16
)
Add: Net adjustment from accelerated
amortization (3)
5
Add: Net adjustment from costs associated
with pending acquisition (4)
4
Deduct: Net adjustment from pension and
postretirement adjustments (7)
(11
)
Add: Net adjustment from divestiture
(8)
13
Adjusted Net earnings attributable to
Campbell Soup Company
$
903
Diluted net earnings per share
attributable to Campbell Soup Company, as reported
$
2.85
Add: Net adjustment from restructuring
charges, implementation costs and other related costs (1)
.17
Deduct: Net adjustment from commodity
mark-to-market adjustments (2)
(.05
)
Add: Net adjustment from accelerated
amortization (3)
.02
Add: Net adjustment from costs associated
with pending acquisition (4)
.01
Deduct: Net adjustment from pension and
postretirement adjustments (7)
(.04
)
Add: Net adjustment from divestiture
(8)
.04
Adjusted Diluted net earnings per share
attributable to Campbell Soup Company
$
3.00
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240305047630/en/
INVESTOR CONTACT: Rebecca Gardy
(856) 342-6081 Rebecca_Gardy@campbells.com
MEDIA CONTACT: James Regan (856)
219-6409 James_Regan@campbells.com
Grafico Azioni Campbell Soup (NYSE:CPB)
Storico
Da Feb 2025 a Mar 2025
Grafico Azioni Campbell Soup (NYSE:CPB)
Storico
Da Mar 2024 a Mar 2025
