Vending

Campbell Soup boosts Q3 2022 results on rising customer demand, supply

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June 8, 2022

Campbell Soup improved its sales and earnings for Q3 2022 over the prior year period, as both customer demand and supply recovered, according to an earnings release. Highlights include:

• Net sales in the quarter increased 7% from $1.98 billion in Q3 2021 to $2.13 billion in the quarter ending May 1, 2022. Organic net sales, which exclude the impact from the sale of the Plum baby food and snacks business, increased 9%. Inflation-driven pricing and sales allowances of 11% more than offset volume declines of 3%.
• Net earnings improved from $160 million to $188 million.
• EPS from continuing operations increased 15% from 54 cents to 62 cents while adjusted EPS from continuing operations increased 37%, to 70 cents, primarily reflecting the increase in adjusted EBIT, lower adjusted net interest expense and the benefit of lower weighted average diluted shares outstanding.
• Meals and beverages net sales rose 6% from $1.06 billion to $1.13 billion. Organic net sales, which exclude the impact from the sale of the Plum baby food and snacks business, increased 9% driven by increases in U.S. soup, foodservice and Prego pasta sauces, partially offset by declines in Canada. Inflation-driven pricing and sales allowances were partially offset by increased promotional spending.
• Snack net sales, both reported and organic, increased 8% from $922 million to $999 million, while sales of power brands were up 13%. Snacks sales increased due to increases in salty snacks, primarily Snyder's of Hanover pretzels and Kettle Brand potato chips, as well as in cookies and crackers, primarily Goldfish crackers.

Shares traded at $46.56 today against a 52-week range of $39.76-$51.94.

The $2.13 billion in quarterly revenue beat analyst expectations by $90 million while the non-GAAP EPS of 70 cents beat expectations by 9 cents, according to Seeking Alpha.

"As expected, we had a strong recovery across the business in the quarter with high-single-digit sales growth driven by sustained consumer demand for our brands and significantly improved supply," Mark Clouse, president and CEO, said in the press release. "Our improved supply chain execution along with inflation-driven pricing began to mitigate the margin pressure we have experienced over the last 12 months."

Campbell is raising its full-year fiscal 2022 net sales guidance to reflect year-to-date performance, expectations of continued strong demand for its portfolio of brands, and limited price elasticities amidst a heightened inflationary environment, as well as continued supply recovery and improved service levels.