Campbell Soup's Q2 Top-Line Misses Consensus, Expects Improvement In 2H Performance

Campbell Soup Company CPB reported a second-quarter FY22 sales decline of 3.1% year-on-year, to $2.21 billion, missing the consensus of $2.24 billion.
Net sales from the Meals & Beverages segment declined 3%, and the Snacks segment fell 3%.
The gross margin contracted 410 basis points Y/Y to 30.3%. Adjusted EBIT of $318 million decreased 17% Y/Y.
The operating margin was 15.1%, and the operating income declined 17% Y/Y to $334 million.
Adjusted EPS of $0.69 was in line with the Street view.
The company held $357 million in cash and equivalents as of January 30, 2022. Cash provided by operating activities for six months totaled $766 million.
"As expected, our second quarter was challenging as we lapped a difficult comparison and navigated labor and supply constraints, made even tougher by the Omicron surge," said CEO Mark Clouse.
Outlook: Campbell reaffirmed the FY22 outlook, including an adjusted EPS outlook of $2.75 - $2.85 versus the consensus of $2.79.
The company expects 2H financial performance to improve Y/Y as recent pricing actions will be fully reflected in the market while supply and labor conditions improve.
Price Action: CPB shares are trading higher by 2.03% at $43.16 on the last check Wednesday.

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