Campbell Soup Company (CPB) announced its fourth-quarter financial results, reporting net sales of $2.293 billion, an 11% increase compared to the same period last year. However, the sales figure fell short of the consensus estimate of $2.313 billion. Organic sales, which exclude the impact of acquisitions and divestitures, declined by 1%.
The company’s Meals & Beverages segment experienced a significant surge, with net sales increasing by 28%. Conversely, the Snacks segment saw a 3% decline in sales. Adjusted earnings per share (EPS) reached $0.63, surpassing the consensus estimate of $0.62 and demonstrating a notable improvement from the $0.50 reported in the previous year.
Gross profit climbed to $675 million from $656 million, resulting in a margin of 29.4% compared to 31.7% in the prior year. However, adjusted EBIT (earnings before interest and taxes) declined to $77 million from $272 million, primarily attributed to impairment charges and pension adjustments. Adjusted EBIT, which excludes these charges, surged by 36% to $329 million, driven by increased adjusted gross profit stemming from the acquisition and overall business performance.
Campbell’s cost-saving initiatives have yielded substantial results, with the company achieving $950 million in savings towards its $1 billion goal. This includes $60 million saved in fiscal 2024, along with $10 million in synergies realized from the integration of Sovos Brands.
The company’s operating cash flow for the fiscal year stood at $1.2 billion, reflecting a slight increase from $1.1 billion in the previous year, largely attributed to changes in working capital. Campbell distributed $445 million in dividends, repurchased $67 million in stock, and still had $301 million remaining within its $500 million buyback program. Additionally, $37 million remained under the $250 million anti-dilutive repurchase program.
Mark Clouse, Campbell’s President and CEO, expressed satisfaction with the fourth-quarter performance, highlighting sequential volume improvement and margin expansion compared to the previous year. He also emphasized the company’s progress towards its long-term strategic plan, navigating the evolving consumer landscape. Clouse lauded the integration of Sovos Brands, describing it as a transformative step in the Meals & Beverages growth trajectory. He also acknowledged the advancements in the Snacks margin journey, as well as the significant innovation and improvements in sales and marketing capabilities. He concluded by expressing confidence in the company’s ability to deliver consistent progress in fiscal 2025.
Looking ahead, Campbell projects net sales growth of 9% to 11% year-over-year, with organic growth anticipated to be between 0% and 2%. The company forecasts Adjusted EPS in the range of $3.12 to $3.22, while the consensus estimate stands at $3.23. CPB shares were trading lower by 0.74% at $49.80 premarket at the last check on Thursday.
