Campbell Soup boosts Q2 2023 sales and earnings driven by price gains

Campbell Soup Co. lifted its Q2 2023 sales and earnings boosted by price hikes, according to an earnings release. Highlights include:

• Net sales in the quarter increased 12%, from $2.2 billion in Q2 2022 to $2.5 billion for the quarter ending Jan. 29, 2023. Organic net sales increased 13% as favorable inflation-driven net price realization was partially offset by volume/mix declines.
• Net earnings rose from $212 million to $232 million in the comparative quarters.
• Reported EPS increased from 70 cents to 77 cents in the comparative quarters.
• Adjusted EPS increased 16%, from 69 cents to 80 cents, primarily reflecting the increase in adjusted EBIT, partially offset by a higher adjusted effective tax rate.
• Meals and beverages net sales increased 10% to $1.408 billion. Organic net sales increased 11% in the quarter, primarily due to increases in U.S. retail products, including U.S. soup, Prego pasta sauces and Pace Mexican sauces, as well as gains in foodservice.
• Snacks net sales increased 15% to $1.08 billion, driven by sales of power brands, which were up 20%. Sales growth was driven by increases in cookies and crackers, primarily Goldfish crackers and Pepperidge Farm cookies and in salty snacks, primarily Snyder's of Hanover pretzels, Snack Factory pretzel crisps and Kettle brand potato chips.

Shares traded at $53.05 today against a 52-week range of $41.73 to $57.78.

The approximately $2.5 billion in net sales surpassed the Zacks Consensus Estimate of $2.438 billion while the adjusted EPS of 80 cents surpassed the Zacks Consensus Estimate of 73 cents, according to Zacks.

"The momentum of our business continued as we delivered double-digit sales and earnings per share growth for a second consecutive quarter," Mark Clouse, president and CEO, said in the press release. "While the top line benefited from favorable net price realization, we also continued to see strong brand health."

Campbell is raising its full-year fiscal 2023 net sales outlook and raising the midpoint of its adjusted EBIT and adjusted EPS outlook from the guidance provided on Dec. 7, 2022.

The company has raised its full year 2023 guidance for net sales from 7%-9% to 8.5%-10% and its adjusted EPS from 2%-5% to 3.5%-5%. The higher revenue expectations reflect the strength of Campbell's brands with price elasticities remaining favorable to historical norms and continued strong supply chain execution.