Campbell Soup Company CPB reported third-quarter fiscal 2024 net sales growth of 6% year-over-year to $2.369 billion, beating the consensus of $2.353 billion.
Net sales from the Meals & Beverages segment increased 15% YoY, and the Snacks segment declined by 2%.
“We delivered a solid third quarter with sequential volume improvement, stable organic net sales, double-digit adjusted EBIT and adjusted EPS growth. We are excited about the integration of the Sovos Brands business, which already is bringing significant incremental growth to our company as we continue to navigate the pace of consumer recovery,” commented Campbell’s President and CEO, Mark Clouse.
Adjusted EPS was $0.75, up from $0.68 a year ago, beating the consensus of $0.70.
Gross margin expanded 90 basis points year over year to 30.9%. Adjusted EBIT increased 13% to $354 million, primarily due to higher adjusted gross profit from the contribution of the acquisition and the base business.
CPB’s cash flow from operations for the nine months stood at $897 million compared to $918 million, primarily due to costs associated with the acquisition. Capital expenditures were $376 million compared to $257 million.
Campbell has saved $940 million from its cost savings program, aiming for $1 billion by fiscal 2025. It also gained $3 million in Sovos Brands synergies this quarter and expects $50 million annually by fiscal 2026.
Campbell Soup’s regular quarterly dividend of $0.37 per share is payable July 29 to shareholders of record as of July 3.
Outlook: Campbell updated its fiscal 2024 guidance previously provided on March 6, 2024, to reflect the expected performance of the base business and the impact of the recent acquisition.
The company expects adjusted EPS of $3.07-$3.10 (prior $3.09-$3.15) versus the consensus of $3.03.
The company sees FY24 sales growth YoY of +3% to +4% (prior: tracking to the lower end of (0.5)% to +1.5% range) and Adjusted EBIT growth of +6.5% to +7% (prior +3% to +5%).
The company expects to build momentum into the fourth quarter, with continued stabilization of year-over-year volume growth, double-digit growth of both fourth-quarter adjusted EBIT and adjusted EPS, and continued momentum on the integration of Sovos Brands.
Price Action: CPB shares are trading lower by 1.63% at $43.46 at the last check Wednesday.
Photo via Wikimedia Commons
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