Foodservice

Campbell Soup lifts Q3 sales on price inflation, earnings fall

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June 7, 2023

Campbell Soup Co. lifted its Q3 2023 sales boosted by price inflation while earnings fell due to higher expenses, according to an earnings report.

Highlights include:

• Net sales increased 5% from $2.13 billion in Q3 2022 to $2.23 billion in the quarter ending April 30, 202. Favorable inflation-driven net price realization was partially offset by an expected decline in volume/mix, which was driven by lapping the prior year retailer inventory rebuild as well as lower volume consumption due to elasticities.
• Earnings before interest and taxes fell 14% from $294 million to $254 million on a GAAP basis and 2% from $321 million to $313 million on an adjusted basis in the comparative quarters.
• Reported EPS decreased 15% from 62 cents to 53 cents. Excluding items impacting comparability, adjusted EPS decreased 3% from 70 cents to 68 cents.
• Meals and beverages net sales decreased 2% and organic net sales decreased 1% in the quarter primarily due to declines in U.S. soup, partially offset by gains in foodservice.
• Snacks net sales in the quarter, both reported and organic, increased 12% driven by sales of the eight power brands, which were up 16%. Sales growth was driven by increases in cookies and crackers, primarily Goldfish crackers and Lance sandwich crackers, and in salty snacks, primarily Kettle Brand potato chips, Snack Factory pretzel crisps, Cape Cod potato chips and Snyder's of Hanover pretzels.

Shares traded today at $47.37 against a 52-week range of $44.37-$57.78.

The $2.23 billion in quarterly revenue was in line with analyst expectations while the non-GAAP EPS of 68 cents beat expectations by 3 cents, according to Seeking Alpha.

"Our third-quarter results were in line with our expectations and were driven by in-market momentum, continued best-in-class supply chain execution and favorable inflation-driven net price realization, all despite the anticipated challenging comparison from the prior year's retailer inventory rebuild," Mark Clouse, president and CEO, said in a press release. "Our year-to-date results and execution give us continued confidence in our ability to deliver our full-year guidance, with adjusted EPS currently tracking to the upper end of our guidance range."

For the full year, the company expects net sales to rise 8.5% to 10% over 2022 with adjusted EPS rising 3.5% to 5% reaching $2.95 to $3.00.