Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
Campbell Soup Company (NYSE: CPB) reported robust financial results for the third quarter of fiscal 2024, which ended on April 28, 2024. The company completed its acquisition of Sovos Brands, Inc. on March 12, 2024, which significantly contributed to its performance. Net sales for the quarter were $2.4 billion, representing a 6% increase compared to the same period last year. On an organic basis, net sales remained comparable to the prior year. Over a two-year compound annual growth rate (CAGR), reported net sales increased by 5%, and organic net sales grew by 2%.
Earnings Before Interest and Taxes (EBIT) for the quarter were $248 million, while adjusted EBIT saw a notable increase of 13% to $354 million, reflecting the positive impact of the Sovos Brands acquisition.The company’s Earnings Per Share (EPS) was $0.44, with adjusted EPS rising 10% to $0.75. Campbell’s President and CEO, Mark Clouse, highlighted the sequential volume improvement and stable organic net sales, which, combined with the acquisition, drove double-digit growth in adjusted EBIT and EPS.
The integration of Sovos Brands has already begun to bring significant incremental growth to Campbell, as evidenced by the quarter’s results. The acquisition played a crucial role in the company’s ability to navigate the pace of consumer recovery, contributing positively to both the top and bottom lines.
Campbell Soup Company Beats EPS and Revenue Expectations in Fiscal Q3
When comparing Campbell’s third-quarter performance against market expectations, the company exceeded analysts’ projections. The expected EPS for the quarter was $0.705, but Campbell reported an adjusted EPS of $0.75, surpassing expectations by 6.4%.
In terms of revenue, Campbell also exceeded expectations. Analysts had anticipated quarterly revenue of $2.33 billion, but the company reported net sales of $2.4 billion, marking a 3% beat. This increase in net sales was driven by the Sovos Brands acquisition and favorable net price realization despite the challenging market conditions and higher cost inflation.
The company’s gross profit increased from $668 million to $732 million, with an improved gross profit margin of 30.9%, up from 30.0% in the previous year. Adjusted gross profit also increased to $740 million, with an adjusted gross profit margin of 31.2%.
Join our Telegram group and never miss a breaking story.
Campbell Updates Full Year Guidance, Expects EPS in the Range of $3.07 to $3.10
Campbell has updated its full-year fiscal 2024 guidance to reflect the expected performance of its base business and the impact of the Sovos Brands acquisition. The company now expects full-year reported net sales growth to be in the range of 3% to 4%, driven by the incremental impact of the acquisition. Organic net sales growth is tracking to the midpoint of the updated range of approximately 0% to down 1%, reflecting the current pace of consumer recovery.
Campbell’s full-year adjusted EBIT growth for the combined business is expected to be approximately 6.5% to 7%, reflecting the partial year contribution of the acquisition, inclusive of integration savings, as well as base business performance.
The company also expects full-year adjusted earnings per share growth for the combined business to be approximately 2% to 3%, with EPS projected to be in the range of $3.07 to $3.10, compared to $3.00 in the prior year. This guidance includes expected dilution from the Sovos Brands acquisition of between $0.01 and $0.02 per share. Campbell anticipates building momentum into the fourth quarter, with continued stabilization of year-over-year volume growth and double-digit growth in both fourth-quarter adjusted EBIT and adjusted earnings per share.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
The post Campbell Soup Beats EPS and Revenue Expectations in Fiscal Q3, Ups Guidance appeared first on Tokenist.