For the fourth quarter:
- Net Sales increased 11% to $2.3 billion and decreased 1% on an
organic basis.
- Earnings Before Interest and Taxes (EBIT) decreased to $77
million. Adjusted EBIT increased 36% to $329 million including the
impact of the Sovos Brands, Inc. (Sovos Brands) acquisition.
- Earnings Per Share (EPS) decreased to $(0.01). Adjusted EPS
increased 26% to $0.63.
For the full year:
- Net Sales increased 3% to $9.6 billion and decreased 1% on an
organic basis.
- EBIT decreased to $1 billion. Adjusted EBIT increased 6% to
$1.5 billion including the impact of the Sovos Brands
acquisition.
- EPS decreased to $1.89. Adjusted EPS increased 3% to
$3.08.
- Returned $512 million to shareholders including $445 million in
dividends.
- Fiscal 2025 Investor Day to be held on September 10, 2024 at
Nasdaq MarketSite.
Campbell Soup Company (NASDAQ:CPB) today reported results
for its fourth-quarter and full-year fiscal 2024 ended July 28,
2024. Unless otherwise stated, all comparisons are to the same
period of fiscal 2023.
CEO Comments “We finished fiscal 2024
with solid fourth-quarter performance including sequential volume
improvement and margin expansion versus prior year and delivered
significant progress against our longer-term strategic plan despite
an evolving consumer landscape,” said Campbell’s President and CEO,
Mark Clouse. “I’d like to thank the entire Campbell's team for
finding ways to deliver solid results in this dynamic environment.
The strength of the Meals & Beverages recovery, including Soup,
was a standout in the quarter as was the competitive advantage of
our supply chain. The integration of Sovos Brands is progressing
ahead of our expectations, marking a transformative shift in our
Meals & Beverages growth trajectory. We’ve also advanced our
Snacks margin journey, while delivering significant innovation and
improved sales and marketing capabilities. All of this provides
continued confidence in our ability to deliver sequential progress
in fiscal 2025 as we continue to navigate the steady and ongoing
recovery in the industry. More importantly, as we look ahead, we
are strengthening our conviction in our longer-term outlook driven
by our advantaged market-leading brands, capabilities and
execution. We look forward to providing the roadmap and
expectations for Campbell's next chapter of growth at our upcoming
investor day.”
Three Months Ended
Twelve Months Ended
($ in millions, except per share)
July 28, 2024
July 30, 2023
% Change
July 28, 2024
July 30, 2023
% Change
Net Sales
As Reported (GAAP)
$2,293
$2,068
11%
$9,636
$9,357
3%
Organic
(1)%
(1)%
Earnings Before Interest and Taxes
(EBIT)
As Reported (GAAP)
$77
$272
(72)%
$1,000
$1,312
(24)%
Adjusted
$329
$242
36%
$1,454
$1,367
6%
Diluted Earnings Per Share
As Reported (GAAP)
$(0.01)
$0.57
n/m
$1.89
$2.85
(34)%
Adjusted
$0.63
$0.50
26%
$3.08
$3.00
3%
n/m - not meaningful
Note: A detailed reconciliation of the
reported (GAAP) financial information to the adjusted financial
information is included at the end of this news release.
Items Impacting Comparability The table below presents a
summary of items impacting comparability in each period. A detailed
reconciliation of the reported (GAAP) financial information to the
adjusted information is included at the end of this news
release.
Diluted Earnings Per
Share
Three Months Ended
Twelve Months Ended
July 28, 2024
July 30, 2023
July 28, 2024
July 30, 2023
As Reported (GAAP)
$(0.01)
$0.57
$1.89
$2.85
Costs associated with cost savings and
optimization initiatives
$0.10
$0.04
$0.28
$0.17
Costs associated with acquisition
$0.04
$0.01
$0.36
$0.01
Commodity mark-to-market losses
(gains)
$0.07
$(0.08)
$0.05
$(0.05)
Accelerated amortization
$0.02
$0.02
$0.07
$0.02
Pension and postretirement actuarial
losses (gains)
$0.08
$(0.10)
$0.08
$(0.04)
Impairment charges
$0.33
$—
$0.33
$—
Certain litigation expenses
$0.01
$—
$0.02
$—
Cybersecurity incident costs
$—
$—
$0.01
$—
Charges associated with divestiture
$—
$0.04
$—
$0.04
Adjusted*
$0.63
$0.50
$3.08
$3.00
*Numbers may not add due to rounding.
Fourth-Quarter Results Net sales in the quarter increased
11% to $2.3 billion driven by the benefit from the Sovos Brands
acquisition, which is also referred to below as the acquisition.
Organic net sales decreased 1% to $2.0 billion with net price
realization down 2%, partially offset by 1% favorable volume / mix
that sequentially improved from the third quarter.
Gross profit increased to $675 million from $656 million. Gross
profit margin was 29.4% compared to 31.7%. Excluding items
impacting comparability, adjusted gross profit increased to $719
million from $632 million. Adjusted gross profit margin increased
80 basis points to 31.4% mainly driven by supply chain productivity
improvements, which more than offset unfavorable net price
realization, higher cost inflation and other supply chain costs,
and the impact of the acquisition.
Marketing and selling expenses, which represented approximately
8% of net sales, decreased 6% to $188 million. Excluding items
impacting comparability, adjusted marketing and selling expenses
decreased 4% to $187 million, primarily driven by lower advertising
and consumer expense (A&C) on the base business as the company
lapped significant spending in the prior year. Reductions in
A&C on the base business and lower incentive compensation were
partially offset by the impact of the acquisition.
Administrative expenses increased 9% to $182 million. Excluding
items impacting comparability, adjusted administrative expenses
increased 1% to $165 million driven by the impact of the
acquisition and higher general and administrative costs, mostly
offset by the benefits from cost savings initiatives and lower
incentive compensation.
Other expenses were $181 million compared to other income of $9
million, primarily driven by $129 million of non-cash impairment
charges related to Pop Secret and Allied brands (including Tom's,
Jays, Kruncher's, O-Ke-Doke, Stella D'oro and Archway) and by
pension and postretirement actuarial adjustments. Excluding items
impacting comparability, adjusted other expenses were $12 million
compared to $7 million, driven by higher amortization of intangible
assets related to the acquisition and lower pension and
postretirement benefit income.
As reported EBIT decreased to $77 million from $272 million
primarily driven by the above-mentioned impairment charges and
pension and postretirement actuarial adjustments. Excluding items
impacting comparability, adjusted EBIT increased 36% to $329
million primarily due to higher adjusted gross profit from the
contribution of the acquisition and base business performance.
Net interest expense was $83 million compared to $47 million,
primarily due to an increase in interest expense related to higher
levels of debt to fund the acquisition. The effective tax rate was
50.0% compared to 24.9% driven by the impact of impairment charges.
Excluding items impacting comparability, the adjusted effective tax
rate increased 10 basis points to 23.2%.
As reported EPS were a loss of $0.01 per share compared to
earnings of $0.57 per share. Excluding items impacting
comparability, adjusted EPS increased 26% to $0.63 per share
primarily reflecting the increase in adjusted EBIT, partially
offset by higher net interest expense. The acquisition was
approximately neutral to fourth-quarter adjusted earnings per
share.
Full-Year 2024 Results Net sales increased 3% to $9.6
billion driven by the benefit of the recent acquisition. Organic
net sales decreased 1% to $9.2 billion with unfavorable volume /
mix partially offset by the benefit of net price realization.
As reported EBIT decreased 24% to $1.0 billion primarily driven
by the impact of impairment charges and costs associated with the
acquisition. Excluding items impacting comparability, adjusted EBIT
increased 6% to $1.5 billion primarily due to higher adjusted gross
profit from the contribution of the acquisition, partially offset
by higher adjusted marketing and selling and adjusted other
expenses.
Net interest expense increased 32% to $243 million. Excluding
items impacting comparability, adjusted net interest expense was
$241 million compared to $184 million, primarily due to an increase
in interest expense related to higher levels of debt to fund the
acquisition. The effective tax rate increased 120 basis points to
25.1%. Excluding items impacting comparability, the adjusted
effective tax rate was comparable to the prior year at 23.7%.
As reported EPS decreased to $1.89 per share compared to $2.85
per share. Excluding items impacting comparability, adjusted EPS
increased $0.08, or 3%, to $3.08 per share primarily reflecting the
increase in adjusted EBIT, partially offset by higher adjusted net
interest expense. The acquisition was approximately neutral to
full-year adjusted earnings per share.
Cash flow from operations was $1.2 billion compared to $1.1
billion primarily due to changes in working capital. Capital
expenditures were $517 million compared to $370 million. In line
with Campbell’s commitment to return value to its shareholders, the
company paid $445 million of cash dividends and repurchased common
stock of approximately $67 million. As of the fiscal year end, the
company had approximately $301 million remaining under the current
$500 million strategic share repurchase program and approximately
$37 million remaining under its $250 million anti-dilutive share
repurchase program.
Cost Savings Program from Continuing Operations Through
the fourth quarter, Campbell has delivered $950 million of total
savings under its $1 billion multi-year cost savings program,
inclusive of $60 million realized in fiscal 2024.
Additionally, post-closing, the company achieved $10 million in
cost synergies related to the Sovos Brands integration plan.
Full-Year Fiscal 2025 Guidance: Campbell's full-year
fiscal 2025 guidance reflects a balance between sequential progress
and pragmatism as the company continues to navigate the on-going
consumer recovery. The upper end of the range anticipates a quicker
normalization of the consumer environment while the lower end of
the range assumes a slower, more conservative pace of recovery.
The recent Pop Secret business divestiture closed on August 26,
2024, and accordingly, full-year guidance is inclusive of the lost
sales and earnings of that business for the remaining eleven months
of fiscal year 2025. The estimated impact of this divestiture is
expected to reduce reported net sales growth by approximately 1%
and have an expected dilutive impact of $0.04 to adjusted EPS in
fiscal 2025.
Guidance reflects the following underlying assumptions:
- Fiscal 2025 comprises 53 weeks, one additional week compared to
fiscal 2024. The benefit of the 53rd week is included in the fiscal
2025 guidance below and is estimated to be worth approximately 2
points of growth to both reported and organic net sales and
adjusted EBIT, along with $0.06 of adjusted EPS.
- Net sales growth of 9% to 11% reflecting a full twelve-month
contribution from Sovos Brands and the loss of eleven months of net
sales from the divestiture of Pop Secret.
- Organic net sales flat to up 2% reflecting modestly positive
volume/mix compared to fiscal 2024.
- Adjusted EBIT growth of 9% to 11%, including the contribution
from the acquisition, the impact of the divestiture of Pop Secret
and reflecting the following:
- Inflation in the low-single digit range, with continued
mitigation through a variety of levers including productivity
improvements of approximately 3% and cost savings initiatives of
approximately $70 million, inclusive of cost synergies related to
the integration of Sovos Brands.
- A continued commitment to brand investments, with marketing and
selling expenses as a percent of net sales expected to return into
the targeted range of 9-10%, including an increase in the first
quarter of fiscal 2025.
- Total company adjusted EBIT margin comparable to fiscal 2024.
Snacks operating margin is expected to reflect modest growth
inclusive of the near-term margin impact of the Pop Secret
divestiture. Meals & Beverages operating margin is expected to
be modestly lower reflecting the mix impact of Sovos Brands,
partially offset by a modest margin improvement in the base
business.
- Adjusted EPS growth of 1% to 4% with Sovos Brands expected to
be approximately neutral and including the impact of the Pop Secret
divestiture.
- Adjusted net interest expense expected to be between $350
million and $355 million.
- Net interest expense is expected to be higher than fiscal 2024
reflecting a full year of incremental debt related to the Sovos
Brands acquisition and higher expected interest expense associated
with the anticipated refinancing of the company’s March 2025 bond
maturities, with expected debt issuance timing driven by market
conditions.
Other additional guidance assumptions can be found in the
accompanying investor presentation available at
investor.campbellsoupcompany.com/events-and-presentations.
The full-year fiscal 2025 guidance is set forth in the table
below:
FY2024 Results
FY2025 Guidance
($ in millions, except per share)
Net Sales
$9,636
+9% to +11%
Organic Net Sales1
$9,525
0% to 2%
Adjusted EBIT
$1,454
*
+9% to +11%
Adjusted EPS
$3.08
*
+1% to +4%
$3.12 to $3.22
* Adjusted - refer to the detailed
reconciliation of the reported (GAAP) financial information to the
adjusted financial information at the end of this news release.
1 Growth rate adjusted for Sovos Brands
which was acquired on March 12, 2024, the impact of the 53rd week
in fiscal 2025 and Pop Secret which was divested on August 26,
2024.
Note: A non-GAAP reconciliation is not
provided for fiscal 2025 guidance as the company is unable to
reasonably estimate the full-year financial impact of items such as
actuarial gains or losses on pension and postretirement plans
because these impacts are dependent on future changes in market
conditions. The inability to predict the amount and timing of these
future items makes a detailed reconciliation of these
forward-looking financial measures impracticable.
Segment Operating Review An analysis of net sales and
operating earnings by reportable segment follows:
Three
Months Ended July 28, 2024
($ in millions)
Meals & Beverages
Snacks*
Total
Net Sales, as Reported
$1,200
$1,093
$2,293
Volume/Mix
2%
—%
1%
Net Price Realization
(1)%
(2)%
(2)%
Organic Net Sales
1%
(3)%
(1)%
Currency
—%
—%
—%
Acquisition / (Divestiture)1
27%
—%
12%
% Change vs. Prior Year
28%
(3)%
11%
Segment Operating Earnings
$211
$159
% Change vs. Prior Year
60%
1%
*Numbers may not add due to rounding.
1 Reflects the incremental net sales
associated with the Sovos Brands acquisition, which was completed
on March 12, 2024, and the loss of net sales associated with the
divestiture of the Emerald nuts business, which was completed on
May 30, 2023.
Note: A detailed reconciliation of the
reported (GAAP) net sales to organic net sales is included at the
end of this news release.
Twelve
Months Ended July 28, 2024
($ in millions)
Meals & Beverages*
Snacks
Total
Net Sales, as Reported
$5,258
$4,378
$9,636
Volume/Mix
(2)%
(2)%
(2)%
Net Price Realization
—%
1%
1%
Organic Net Sales
(1)%
(1)%
(1)%
Currency
—%
—%
—%
Acquisition / (Divestiture)1
9%
(1)%
4%
% Change vs. Prior Year
7%
(2)%
3%
Segment Operating Earnings
$974
$648
% Change vs. Prior Year
9%
1%
*Numbers may not add due to rounding.
1 Reflects the incremental net sales
associated with the Sovos Brands acquisition, which was completed
on March 12, 2024, and the loss of net sales associated with the
divestiture of the Emerald nuts business, which was completed on
May 30, 2023.
Note: A detailed reconciliation of the
reported (GAAP) net sales to organic net sales is included at the
end of this news release.
Meals & Beverages Net sales in the quarter increased
28% driven by the benefit of the Sovos Brands acquisition.
Excluding the acquisition, organic net sales increased 1% driven by
gains in U.S. Soup, foodservice and Prego pasta sauces, partially
offset by declines in beverages. Favorable volume / mix of 2% was
partially offset by lower net price realization of 1%. Sales of
U.S. soup increased 2% primarily due to an increase in broth,
partially offset by decreases in ready-to-serve soups and condensed
soups.
Operating earnings in the quarter increased 60% primarily driven
by the contribution of the acquisition and higher gross profit in
the base business. Gross profit margin increased due to lower other
supply chain costs, supply chain productivity improvements and
favorable mix, partially offset by moderate inflation, the impact
of the recent acquisition and planned unfavorable net price
realization.
Snacks Net sales, both reported and organic, decreased 3%
in the quarter. Volume / mix was flat with approximately 1% growth
in power brands and a 1% reduction in partner and contract brands.
In addition, there was slightly more than a 2% unfavorable net
price realization of which approximately half was a planned net
pricing investment and the balance reflecting the lapping of
favorable trade phasing in the fourth quarter of fiscal 2023.
Operating earnings in the quarter increased 1% primarily due to
lower marketing and selling expenses, partially offset by lower
gross profit. Gross profit margin decreased due to higher other
supply chain costs and lower net price realization, partially
offset by supply chain productivity improvements.
Corporate Corporate expense was $272 million in the
fourth quarter of fiscal 2024 compared to $17 million. The increase
was primarily due to non-cash items impacting comparability,
partially offset by lower administrative expenses.
Conference Call and Webcast Campbell will host a
conference call to discuss these results today at 8:00 a.m. Eastern
Time. Participants calling from the U.S. may dial in using the
toll-free phone number (888) 210-3346. Participants calling from
outside the U.S. may dial in using phone number +1 (646) 960-0253.
The conference access code is 2518868. In addition to dial-in,
access to a live listen-only audio webcast and accompanying slide
presentation, as well as a replay of the webcast, will be available
at investor.campbellsoupcompany.com/events-and-presentations.
Reportable Segments Campbell Soup Company earnings
results are reported as follows:
Meals & Beverages, which consists
of our soup, simple meals and beverage products in retail and
foodservice in U.S. and Canada. The segment includes the following
products: Campbell’s condensed and ready-to-serve soups; Swanson
broth and stocks; Pacific Foods broth, soups and non-dairy
beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s
gravies, pasta, beans and dinner sauces; Swanson canned poultry; V8
juices and beverages; and Campbell’s tomato juice; and as of March
12, 2024, Rao's pasta sauces, dry pasta, frozen entrées, frozen
pizza and soups; Michael Angelo's frozen entrées and pasta sauces;
and noosa yogurts. The segment also includes snacking products in
foodservice and Canada.
Snacks, which consists of Pepperidge
Farm cookies*, crackers, fresh bakery and frozen products,
including Goldfish crackers*, Snyder’s of Hanover pretzels*, Lance
sandwich crackers*, Cape Cod potato chips*, Kettle Brand potato
chips*, Late July snacks*, Snack Factory pretzel crisps*, and other
snacking products in retail in the U.S. We refer to the * brands as
our "power brands." The segment also includes the retail business
in Latin America. The segment included the results of our Emerald
nuts business, which was sold on May 30, 2023, and Pop Secret
business, which was sold on August 26, 2024.
About Campbell For more than 150 years, Campbell
(Nasdaq:CPB) has been connecting people through food they love.
Generations of consumers have trusted us to provide delicious and
affordable food and beverages. Headquartered in Camden, N.J. since
1869, the company generated fiscal 2024 net sales of $9.6 billion.
Our portfolio includes iconic brands such as Campbell’s, Cape Cod,
Goldfish, Kettle Brand, Lance, Late July, Milano, Michael Angelo's,
noosa, Pace, Pacific Foods, Pepperidge Farm, Prego, Rao's, Snyder’s
of Hanover, Swanson and V8. Campbell has a heritage of giving back
and acting as a good steward of the environment. The company is a
member of the Standard & Poor's 500 as well as the FTSE4Good
and Bloomberg Gender-Equality Indices. For more information, visit
www.campbellsoupcompany.com.
Forward-Looking Statements
This release contains “forward-looking statements” that reflect
the company’s current expectations about the impact of its future
plans and performance on the company’s business or financial
results. These forward-looking statements, including any statements
made regarding sales, EBIT and EPS guidance, rely on a number of
assumptions and estimates that could be inaccurate, and which are
subject to risks and uncertainties. The factors that could cause
the company’s actual results to vary materially from those
anticipated or expressed in any forward-looking statement include:
the risk that the cost savings and any other synergies from the
Sovos Brands, Inc. (“Sovos Brands”) transaction may not be fully
realized or may take longer or cost more to be realized than
expected, including that the Sovos Brands transaction may not be
accretive within the expected timeframe or the extent anticipated;
the risks related to the availability of, and cost inflation in,
supply chain inputs, including labor, raw materials, commodities,
packaging and transportation; the company’s ability to execute on
and realize the expected benefits from its strategy, including
growing sales in snacks and growing/maintaining its market share
position in soup; the impact of strong competitive responses to the
company’s efforts to leverage its brand power with product
innovation, promotional programs and new advertising; the risks
associated with trade and consumer acceptance of product
improvements, shelving initiatives, new products and pricing and
promotional strategies; the ability to realize projected cost
savings and benefits from cost savings initiatives and the
integration of recent acquisitions; disruptions in or
inefficiencies to the company’s supply chain and/or operations,
including reliance on key co-manufacturer and supplier
relationships; the risks related to the effectiveness of the
company's hedging activities and the company's ability to respond
to volatility in commodity prices; the company’s ability to manage
changes to its organizational structure and/or business processes,
including selling, distribution, manufacturing and information
management systems or processes; changes in consumer demand for the
company’s products and favorable perception of the company’s
brands; changing inventory management practices by certain of the
company’s key customers; a changing customer landscape, with value
and e-commerce retailers expanding their market presence, while
certain of the company’s key customers maintain significance to the
company’s business; product quality and safety issues, including
recalls and product liabilities; the possible disruption to the
independent contractor distribution models used by certain of the
company’s businesses, including as a result of litigation or
regulatory actions affecting their independent contractor
classification; the uncertainties of litigation and regulatory
actions against the company; the costs, disruption and diversion of
management’s attention associated with activist investors; a
disruption, failure or security breach of the company’s or the
company's vendors' information technology systems, including
ransomware attacks; impairment to goodwill or other intangible
assets; the company’s ability to protect its intellectual property
rights; increased liabilities and costs related to the company’s
defined benefit pension plans; the company’s ability to attract and
retain key talent; goals and initiatives related to, and the
impacts of, climate change, including weather-related events;
negative changes and volatility in financial and credit markets,
deteriorating economic conditions and other external factors,
including changes in laws and regulations; unforeseen business
disruptions or other impacts due to political instability, civil
disobedience, terrorism, geopolitical conflicts, extreme weather
conditions, natural disasters, pandemics or other outbreaks of
disease or other calamities; and other factors described in the
company’s most recent Form 10-K and subsequent Securities and
Exchange Commission filings. This discussion of uncertainties is by
no means exhaustive but is designed to highlight important factors
that may impact the company’s outlook. The company disclaims any
obligation or intent to update forward-looking statements in order
to reflect new information, events or circumstances after the date
of this release.
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF
EARNINGS (unaudited)
(millions, except per share
amounts)
Three Months Ended
July 28, 2024
July 30, 2023
Net sales
$
2,293
$
2,068
Costs and expenses
Cost of products sold
1,618
1,412
Marketing and selling expenses
188
199
Administrative expenses
182
167
Research and development expenses
26
26
Other expenses / (income)
181
(9
)
Restructuring charges
21
1
Total costs and expenses
2,216
1,796
Earnings before interest and taxes
77
272
Interest, net
83
47
Earnings (loss) before taxes
(6
)
225
Taxes on earnings
(3
)
56
Net earnings (loss)
(3
)
169
Net loss attributable to noncontrolling
interests
—
—
Net earnings (loss) attributable to
Campbell Soup Company
$
(3
)
$
169
Per share - basic
Net earnings (loss) attributable to
Campbell Soup Company
$
(.01
)
$
.57
Weighted average shares outstanding -
basic
298
298
Per share - assuming dilution
Net earnings attributable to Campbell Soup
Company
$
(.01
)
$
.57
Weighted average shares outstanding -
assuming dilution
298
299
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF
EARNINGS
(millions, except per share
amounts)
Twelve Months Ended
July 28, 2024
July 30, 2023
Net sales
$
9,636
$
9,357
Costs and expenses
Cost of products sold
6,665
6,440
Marketing and selling expenses
833
811
Administrative expenses
737
654
Research and development expenses
102
92
Other expenses / (income)
261
32
Restructuring charges
38
16
Total costs and expenses
8,636
8,045
Earnings before interest and taxes
1,000
1,312
Interest, net
243
184
Earnings before taxes
757
1,128
Taxes on earnings
190
270
Net earnings
567
858
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
567
$
858
Per share - basic
Net earnings attributable to Campbell Soup
Company
$
1.90
$
2.87
Weighted average shares outstanding -
basic
298
299
Per share - assuming dilution
Net earnings attributable to Campbell Soup
Company
$
1.89
$
2.85
Weighted average shares outstanding -
assuming dilution
300
301
CAMPBELL SOUP COMPANY
CONSOLIDATED SUPPLEMENTAL
SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share
amounts)
Three Months Ended
July 28, 2024
July 30, 2023
Percent
Change
Sales
Contributions:
Meals & Beverages
$
1,200
$
936
28%
Snacks
1,093
1,132
(3)%
Total sales
$
2,293
$
2,068
11%
Earnings
Contributions:
Meals & Beverages
$
211
$
132
60%
Snacks
159
158
1%
Total operating earnings
370
290
28%
Corporate income (expense)
(272
)
(17
)
Restructuring charges
(21
)
(1
)
Earnings before interest and taxes
77
272
(72)%
Interest, net
83
47
Taxes on earnings
(3
)
56
Net earnings (loss)
(3
)
169
n/m
Net loss attributable to noncontrolling
interests
—
—
Net earnings (loss) attributable to
Campbell Soup Company
$
(3
)
$
169
n/m
Per share - assuming dilution
Net earnings attributable to Campbell Soup
Company
$
(.01
)
$
.57
n/m
n/m - not meaningful
CAMPBELL SOUP COMPANY
CONSOLIDATED SUPPLEMENTAL
SCHEDULE OF SALES AND EARNINGS
(millions, except per share
amounts)
Twelve Months Ended
July 28, 2024
July 30, 2023
Percent
Change
Sales
Contributions:
Meals & Beverages
$
5,258
$
4,907
7%
Snacks
4,378
4,450
(2)%
Total sales
$
9,636
$
9,357
3%
Earnings
Contributions:
Meals & Beverages
$
974
$
894
9%
Snacks
648
640
1%
Total operating earnings
1,622
1,534
6%
Corporate income (expense)
(584
)
(206
)
Restructuring charges
(38
)
(16
)
Earnings before interest and taxes
1,000
1,312
(24)%
Interest, net
243
184
Taxes on earnings
190
270
Net earnings
567
858
(34)%
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
567
$
858
(34)%
Per share - assuming dilution
Net earnings attributable to Campbell Soup
Company
$
1.89
$
2.85
(34)%
CAMPBELL SOUP COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(millions)
July 28, 2024
July 30, 2023
Current assets
$
2,190
$
2,061
Plant assets, net
2,698
2,398
Intangible assets, net
9,793
7,107
Other assets
554
492
Total assets
$
15,235
$
12,058
Current liabilities
$
3,576
$
2,222
Long-term debt
5,761
4,498
Other liabilities
2,102
1,675
Total equity
3,796
3,663
Total liabilities and equity
$
15,235
$
12,058
Total debt
$
7,184
$
4,689
Total cash and cash equivalents
$
108
$
189
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(millions)
Twelve Months Ended
July 28, 2024
July 30, 2023
Cash flows from operating activities:
Net earnings
$
567
$
858
Adjustments to reconcile net earnings to
operating cash flow
Impairment charges
129
—
Restructuring charges
38
16
Stock-based compensation
99
63
Amortization of inventory fair value
adjustment from acquisition
17
—
Pension and postretirement benefit expense
(income)
39
(22
)
Depreciation and amortization
411
387
Deferred income taxes
(47
)
(5
)
Net loss on sale of business
—
13
Other
138
100
Changes in working capital, net of
acquisition and divestiture
Accounts receivable
(16
)
(1
)
Inventories
11
(64
)
Other current assets
4
13
Accounts payable and accrued
liabilities
(128
)
(164
)
Other
(77
)
(51
)
Net cash provided by operating
activities
1,185
1,143
Cash flows from investing activities:
Purchases of plant assets
(517
)
(370
)
Purchases of route businesses
(29
)
(13
)
Sales of route businesses
34
1
Business acquired, net of cash
acquired
(2,617
)
—
Sale of business
—
41
Other
1
1
Net cash used in investing activities
(3,128
)
(340
)
Cash flows from financing activities:
Short-term borrowings, including
commercial paper and delayed draw term loan
5,622
3,677
Short-term repayments, including
commercial paper and delayed draw term loan
(5,576
)
(3,749
)
Long-term borrowings
2,496
500
Long-term repayments
(100
)
(566
)
Dividends paid
(445
)
(447
)
Treasury stock purchases
(67
)
(142
)
Treasury stock issuances
2
22
Payments related to tax withholding for
stock-based compensation
(46
)
(19
)
Payments of debt issuance costs
(23
)
—
Other
—
1
Net cash provided by (used in) financing
activities
1,863
(723
)
Effect of exchange rate changes on
cash
(1
)
—
Net change in cash and cash
equivalents
(81
)
80
Cash and cash equivalents — beginning of
period
189
109
Cash and cash equivalents — end of
period
$
108
$
189
Reconciliation of GAAP to Non-GAAP Financial
Measures Fiscal Year Ended July 28, 2024
Campbell Soup Company (the "company") uses certain non-GAAP
financial measures as defined by the Securities and Exchange
Commission in certain communications. These non-GAAP financial
measures are measures of performance not defined by accounting
principles generally accepted in the United States and should be
considered in addition to, not in lieu of, GAAP reported measures.
Management believes that also presenting certain non-GAAP financial
measures provides additional information to facilitate comparison
of the company's historical operating results and trends in its
underlying operating results, and provides transparency on how the
company evaluates its business. Management uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the company's performance. Management
considers quantitative and qualitative factors in assessing whether
to adjust for the impact of items that may be significant or that
could affect an understanding of the company’s performance and
trends in its underlying operating results. The adjustments on
earnings may include but are not limited to items such as: unusual
or non-recurring gains or charges; costs associated with cost
savings and optimization initiatives; actuarial gains or losses on
pension and postretirement plans; unrealized mark-to-market gains
or losses on outstanding undesignated commodity hedges; gains or
losses on the extinguishment of debt; gains or losses on
divestitures; costs associated with acquisitions; impairment
charges or accelerated amortization; certain litigation expenses;
and costs related to a cybersecurity incident. Depending upon facts
or circumstances, management may change these adjustments. When
these adjustments change, the company will provide updated
definitions of its non-GAAP financial measures. When items no
longer impact the company’s current or future presentation of
non-GAAP operating results, the company will remove these items
from its non-GAAP definitions.
Organic Net Sales Organic
net sales are net sales excluding the impact of currency,
acquisitions and divestitures. Management believes that excluding
these items, which are not part of the ongoing business, improves
the comparability of year-to-year results. A reconciliation of net
sales as reported to organic net sales follows.
Three Months Ended
July 28, 2024
July 30, 2023
% Change
(millions)
Net Sales,
as
Reported
Impact of Currency
Impact of Acquisition
Organic Net Sales
Net Sales,
as
Reported
Impact of Divestiture
Organic Net Sales
Net Sales,
as
Reported
Organic Net Sales
Meals & Beverages
$
1,200
$
2
$
(257
)
$
945
$
936
$
—
$
936
28
%
1
%
Snacks
1,093
—
—
1,093
1,132
(5
)
1,127
(3
)%
(3
)%
Total Net Sales
$
2,293
$
2
$
(257
)
$
2,038
$
2,068
$
(5
)
$
2,063
11
%
(1
)%
Twelve Months Ended
July 28, 2024
July 30, 2023
% Change
(millions)
Net Sales,
as
Reported
Impact of Currency
Impact of Acquisition
Organic Net Sales
Net Sales,
as
Reported
Impact of Divestiture
Organic Net Sales
Net Sales,
as
Reported
Organic Net Sales
Meals & Beverages
$
5,258
$
5
$
(423
)
$
4,840
$
4,907
$
—
$
4,907
7
%
(1
)%
Snacks
4,378
(2
)
—
4,376
4,450
(51
)
4,399
(2
)%
(1
)%
Total Net Sales
$
9,636
$
3
$
(423
)
$
9,216
$
9,357
$
(51
)
$
9,306
3
%
(1
)%
Twelve Months Ended
July 28, 2024
(millions)
Net Sales,
as
Reported
Impact of Divestiture
Organic Net Sales for
FY 2025 Guidance
Meals & Beverages
$
5,258
$
—
$
5,258
Snacks
4,378
(111
)
4,267
Total Net Sales
$
9,636
$
(111
)
$
9,525
Items Impacting Earnings
Adjusted Net earnings are net earnings excluding the impact of
costs associated with cost savings and optimization initiatives,
costs associated with acquisitions, unrealized mark-to-market gains
or losses on outstanding undesignated commodity hedges, accelerated
amortization, actuarial gains or losses on pension and
postretirement plans, impairment charges, certain litigation
expenses, costs related to a cybersecurity incident, and gains or
losses on divestitures. Management believes that financial
information excluding certain items that are not considered to
reflect the ongoing operating results, such as those listed below,
improves the comparability of year-to-year results. Consequently,
management believes that investors may be able to better understand
its results excluding these items.
The following items impacted earnings:
(1)
The company has implemented several cost
savings initiatives in recent years. In the fourth quarter of
fiscal 2024, the company recorded Restructuring charges of $16
million and implementation costs and other related costs of $17
million in Cost of products sold and $7 million in Administrative
expenses related to these initiatives. In the fourth quarter of
fiscal 2023, the company recorded Restructuring charges of $1
million and implementation costs and other related costs of $6
million in Cost of products sold, $5 million in Marketing and
selling expenses, $3 million in Administrative expenses and $1
million in Research and development expenses (aggregate impact of
$13 million after tax, or $.04 per share) related to these
initiatives. In fiscal 2024, the company recorded Restructuring
charges of $17 million and implementation costs and other related
costs of $54 million in Administrative expenses, $26 million in
Cost of products sold, $4 million in Marketing and selling expenses
and $3 million in Research and development expenses related to
these initiatives. In fiscal 2023, the company recorded
Restructuring charges of $16 million and implementation costs and
other related costs of $24 million in Administrative expenses, $18
million in Cost of products sold, $5 million in Marketing and
selling expenses and $3 million in Research and development
expenses (aggregate impact of $50 million after tax, or $.17 per
share) related to these initiatives.
In the second quarter of fiscal 2024, the
company began implementation of a new optimization initiative to
improve the effectiveness of its Snacks direct-store-delivery
route-to-market network. In fiscal 2024, the company recognized $5
million in Marketing and selling expenses related to this
initiative.
In the fourth quarter of fiscal 2024, the
total aggregate impact related to the cost savings and optimization
initiatives was $40 million ($31 million after tax, or $.10 per
share). In fiscal 2024, the total aggregate impact related to the
cost savings and optimization initiatives was $109 million ($83
million after tax, or $.28 per share).
(2)
In the first quarter of fiscal 2024, the
company announced its intent to acquire Sovos Brands, Inc. and on
March 12, 2024, the acquisition closed. In the fourth quarter of
fiscal 2024, the company incurred $14 million of costs associated
with the acquisition, of which $5 million was recorded in
Restructuring charges, $8 million in Administrative expenses and $1
million in Marketing and selling expenses. The aggregate impact was
$11 million after tax, or $.04 per share. In the fourth quarter of
fiscal 2023, the company incurred costs associated with the
acquisition in Other expenses / (income) of $5 million ($4 million
after tax, or $.01 per share). In fiscal 2024, the company incurred
$126 million of costs associated with the acquisition, of which $21
million was recorded in Restructuring charges, $47 million in
Administrative expenses, $35 million in Other expenses / (income),
$3 million in Marketing and selling expenses, $2 million in
Research and development expenses and $18 million in Cost of
products sold, of which $17 million was associated with the
acquisition date fair value adjustment for inventory. The company
also recorded costs of $2 million in Interest expense related to
costs associated with the Delayed Draw Term Loan Credit Agreement
used to fund the acquisition. The aggregate impact was $128
million, $109 million after tax, or $.36 per share.
(3)
In the fourth quarter of fiscal 2024, the
company recognized losses in Cost of products sold of $27 million
($20 million after tax, or $.07 per share) associated with
unrealized mark-to-market adjustments on outstanding undesignated
commodity hedges. In the fourth quarter of fiscal 2023, the company
recognized gains in Cost of products sold of $30 million ($23
million after tax, or $.08 per share) associated with unrealized
mark-to-market adjustments on outstanding undesignated commodity
hedges. In fiscal 2024, the company recognized losses in Cost of
products sold of $22 million ($16 million after tax, or $.05 per
share) associated with unrealized mark-to-market adjustments on
outstanding undesignated commodity hedges. In fiscal 2023, the
company recognized gains in Cost of products sold of $21 million
($16 million after tax, or $.05 per share) associated with
unrealized mark-to-market adjustments on outstanding undesignated
commodity hedges.
(4)
In the fourth quarter of fiscal 2024, the
company recorded accelerated amortization expense in Other expenses
/ (income) of $7 million ($5 million after tax, or $.02 per share)
related to customer relationship intangible assets due to the loss
of certain contract manufacturing customers, which began in the
fourth quarter of fiscal 2023. In the fourth quarter of fiscal
2023, the company recorded accelerated amortization expense in
Other expenses / (income) of $7 million ($5 million after tax, or
$.02 per share). In fiscal 2024, the company recorded accelerated
amortization expense in Other expenses / (income) of $27 million
($20 million after tax, or $.07 per share).
(5)
In the fourth quarter of fiscal 2024, the
company recognized actuarial losses on pension and postretirement
plans in Other expenses / (income) of $33 million ($25 million
after tax, or $.08 per share). In the fourth quarter of fiscal
2023, the company recognized actuarial gains on pension and
postretirement plans in Other expenses / (income) of $41 million
($31 million after tax, or $.10 per share). In fiscal 2023, the
company recognized actuarial gains on pension and postretirement
plans in Other expenses / (income) of $15 million ($11 million
after tax, or $.04 per share).
(6)
In the fourth quarter of fiscal 2024, the
company recognized an impairment charge of $53 million in Other
expenses / (income) on certain salty snacks and cookie trademarks
within the Snacks segment, including Tom's, Jays, Kruncher's,
O-Ke-Doke, Stella D'oro and Archway, collectively referred to as
the company's "Allied brands". In fiscal 2024, sales and operating
performance were below expectations due in part to competitive
pressure and reduced margins. In the fourth quarter of fiscal 2024,
based on recent performance and reevaluation of the position of the
Allied brands within the portfolio, the company lowered its
near-term and long-term outlook for future sales and operating
performance.
In the fourth quarter of fiscal 2024, the
company performed an impairment assessment on the assets in the Pop
Secret business within the Snacks segment as sales and operating
performance were below expectations due in part to competitive
pressure and reduced margins, and as the company pursued divesting
the business. As a result of these factors, in the fourth quarter
of fiscal 2024, the company lowered the long-term outlook for the
business and recognized an impairment charge of $76 million in
Other expenses / (income) on the trademark. The sale of the
business was completed on August 26, 2024.
The total aggregate impact of the
impairment charges was $129 million ($98 million after tax, or $.33
per share).
(7)
In the fourth quarter of fiscal 2024, the
company recorded pre- and after-tax litigation expenses in
Administrative expenses of $2 million ($.01 per share) related to
certain litigation matters. In fiscal 2024, the company recorded
pre- and after-tax litigation expenses in Administrative expenses
of $5 million ($.02 per share) related to the Plum baby food and
snacks business, which was divested on May 3, 2021, and certain
other litigation matters.
(8)
In fiscal 2024, the company recorded costs
of $2 million in Cost of products sold and $1 million in
Administrative expenses (aggregate impact of $2 million after tax,
or $.01 per share) related to a cybersecurity incident that was
identified in the fourth quarter of fiscal 2023.
(9)
In the fourth quarter of fiscal 2023, the
company recorded a pre- and after-tax loss in Other expenses /
(income) of $13 million ($.04 per share) on the sale of its Emerald
nuts business.
The following tables reconcile financial information, presented
in accordance with GAAP, to financial information excluding certain
items:
Three Months Ended
Twelve Months Ended
(millions, except per share amounts)
July 28, 2024
July 30, 2023
Percent Change
July 28, 2024
July 30, 2023
Percent Change
Gross profit, as reported
$
675
$
656
3%
$
2,971
$
2,917
2%
Gross profit margin, as
reported
29.4
%
31.7
%
(230) pts
30.8
%
31.2
%
(40) pts
Costs associated with cost savings and
optimization initiatives (1)
17
6
26
18
Costs associated with acquisition (2)
—
—
18
—
Commodity mark-to-market losses (gains)
(3)
27
(30
)
22
(21
)
Cybersecurity incident costs (8)
—
—
2
—
Adjusted Gross profit
$
719
$
632
14%
$
3,039
$
2,914
4%
Adjusted Gross profit margin
31.4
%
30.6
%
80 pts
31.5
%
31.1
%
40 pts
Marketing and selling expenses, as
reported
$
188
$
199
(6)%
$
833
$
811
3%
Costs associated with cost savings and
optimization initiatives (1)
—
(5
)
(9
)
(5
)
Costs associated with acquisition (2)
(1
)
—
(3
)
—
Adjusted Marketing and selling
expenses
$
187
$
194
(4)%
$
821
$
806
2%
Administrative expenses, as
reported
$
182
$
167
9%
$
737
$
654
13%
Costs associated with cost savings and
optimization initiatives (1)
(7
)
(3
)
(54
)
(24
)
Costs associated with acquisition (2)
(8
)
—
(47
)
—
Certain litigation expenses (7)
(2
)
—
(5
)
—
Cybersecurity incident costs (8)
—
—
(1
)
—
Adjusted Administrative
expenses
$
165
$
164
1%
$
630
$
630
—%
Research and development expenses, as
reported
$
26
$
26
$
102
$
92
Costs associated with cost savings and
optimization initiatives (1)
—
(1
)
(3
)
(3
)
Costs associated with acquisition (2)
—
—
(2
)
—
Adjusted Research and development
expenses
$
26
$
25
$
97
$
89
Other expenses / (income), as
reported
$
181
$
(9
)
$
261
$
32
Costs associated with acquisition (2)
—
(5
)
(35
)
(5
)
Accelerated amortization (4)
(7
)
(7
)
(27
)
(7
)
Pension and postretirement actuarial gains
(losses) (5)
(33
)
41
(33
)
15
Impairment charges (6)
(129
)
—
(129
)
—
Charges associated with divestiture
(9)
—
(13
)
—
(13
)
Adjusted Other expenses /
(income)
$
12
$
7
$
37
$
22
Earnings before interest and taxes, as
reported
$
77
$
272
(72)%
$
1,000
$
1,312
(24)%
Costs associated with cost savings and
optimization initiatives (1)
40
16
109
66
Costs associated with acquisition (2)
14
5
126
5
Commodity mark-to-market losses (gains)
(3)
27
(30
)
22
(21
)
Accelerated amortization (4)
7
7
27
7
Pension and postretirement actuarial
losses (gains) (5)
33
(41
)
33
(15
)
Impairment charges (6)
129
—
129
—
Certain litigation expenses (7)
2
—
5
—
Cybersecurity incident costs (8)
—
—
3
—
Charges associated with divestiture
(9)
—
13
—
13
Adjusted Earnings before interest and
taxes
$
329
$
242
36%
$
1,454
$
1,367
6%
Interest, net, as reported
$
83
$
47
$
243
$
184
Costs associated with acquisition (2)
—
—
(2
)
—
Adjusted Interest, net
$
83
$
47
$
241
$
184
Adjusted Earnings before taxes
$
246
$
195
$
1,213
$
1,183
Taxes on earnings (loss), as
reported
$
(3
)
$
56
n/m
$
190
$
270
(30)%
Effective income tax rate, as
reported
50.0
%
24.9
%
n/m
25.1
%
23.9
%
120 pts
Costs associated with cost savings and
optimization initiatives (1)
9
3
26
16
Costs associated with acquisition (2)
3
1
19
1
Commodity mark-to-market losses (gains)
(3)
7
(7
)
6
(5
)
Accelerated amortization (4)
2
2
7
2
Pension and postretirement actuarial
losses (gains) (5)
8
(10
)
8
(4
)
Impairment charges (6)
31
—
31
—
Certain litigation expenses (7)
—
—
—
—
Cybersecurity incident costs (8)
—
—
1
—
Adjusted Taxes on earnings
$
57
$
45
27%
$
288
$
280
3%
Adjusted effective income tax
rate
23.2
%
23.1
%
10 pts
23.7
%
23.7
%
0 pts
Net earnings (loss) attributable to
Campbell Soup Company, as reported
$
(3
)
$
169
n/m
$
567
$
858
(34)%
Costs associated with cost savings and
optimization initiatives (1)
31
13
83
50
Costs associated with acquisition (2)
11
4
109
4
Commodity mark-to-market losses (gains)
(3)
20
(23
)
16
(16
)
Accelerated amortization (4)
5
5
20
5
Pension and postretirement actuarial
losses (gains) (5)
25
(31
)
25
(11
)
Impairment charges (6)
98
—
98
—
Certain litigation expenses (7)
2
—
5
—
Cybersecurity incident costs (8)
—
—
2
—
Charges associated with divestiture
(9)
—
13
—
13
Adjusted Net earnings attributable to
Campbell Soup Company
$
189
$
150
26%
$
925
$
903
2%
Diluted net earnings per share
attributable to Campbell Soup Company, as reported
$
(.01
)
$
.57
n/m
$
1.89
$
2.85
(34)%
Costs associated with cost savings and
optimization initiatives (1)
.10
.04
.28
.17
Costs associated with acquisition (2)
.04
.01
.36
.01
Commodity mark-to-market losses (gains)
(3)
.07
(.08
)
.05
(.05
)
Accelerated amortization (4)
.02
.02
.07
.02
Pension and postretirement actuarial
losses (gains) (5)
.08
(.10
)
.08
(.04
)
Impairment charges (6)
.33
—
.33
—
Certain litigation expenses (7)
.01
—
.02
—
Cybersecurity incident costs (8)
—
—
.01
—
Charges associated with divestiture
(9)
—
.04
—
.04
Adjusted Diluted net earnings per share
attributable to Campbell Soup Company*
$
.63
$
.50
26%
$
3.08
$
3.00
3%
* The sum of individual per share amounts
may not add due to rounding.
n/m - not meaningful
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240828835766/en/
INVESTOR CONTACT: Rebecca Gardy (856) 342-6081
Rebecca_Gardy@campbells.com
MEDIA CONTACT: James Regan (856) 219-6409
James_Regan@campbells.com
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