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Jul 30, 2023
Campbell Soup Q4 2023 Earnings Report
Campbell Soup's Q4 2023 earnings reflect a mix of sales growth and adjusted profit decline, with strategic plans and acquisition underway.
Key Takeaways
Campbell Soup Company reported a 4% increase in net sales to $2.1 billion for the fourth quarter of fiscal year 2023, with organic net sales up by 5%. However, adjusted EBIT decreased by 10% to $242 million, and adjusted EPS decreased by 11% to $0.50. The company provided full-year fiscal 2024 guidance, anticipating continued momentum against its strategic plan.
Net sales increased by 4%, reaching $2.1 billion, with a 5% rise in organic net sales.
Adjusted EBIT decreased by 10% to $242 million, impacted by higher marketing and administrative expenses.
Adjusted EPS decreased by 11% to $0.50 per share, reflecting the decrease in adjusted EBIT and higher interest expense.
Full-year fiscal 2024 guidance reflects continued strategic momentum, with the Sovos Brands acquisition expected to close by the end of December 2023.
Revenue by Segment
Forward Guidance
Campbell's full-year fiscal 2024 guidance reflects continued momentum against its strategic plan. The pending acquisition of Sovos Brands is currently expected to close by the end of December 2023 and is not included in Campbell's current fiscal 2024 outlook.
Positive Outlook
- Net Sales growth reflecting volume declines expected in the first half of fiscal 2024 with sequential improvement throughout the fiscal year leading to positive trends in the second half.
- Adjusted EBIT and adjusted EPS growth reflecting an expectation of modest adjusted earnings growth and margin progress in fiscal 2024, expected to be second half weighted, due to an improving cost outlook throughout the year, benefiting from a moderating inflationary environment and on-going productivity improvements benefits.
- Continued inflation mitigation through a variety of levers including productivity improvements of approximately 3% and cost savings initiatives of approximately $35 to $40 million.
- A continued commitment to brand investments, with marketing and selling expense as a percent of net sales expected at the low end of its targeted 9-10% range, with a meaningful step-up in marketing and selling spend in the first quarter compared to prior year.
- Division operating margins expected to improve overall for fiscal 2024, with Snacks operating margin expected to be above 15% and modest operating margin expansion in Meals & Beverages expected in the second half of the fiscal year.
Challenges Ahead
Revenue & Expenses
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