Campbell Soup lifts Q4 2022 sales on inflation-driven pricing, earnings fall

Campbell Soup Co. improved its Q4 2022 sales over the prior year period, boosted by inflation driven pricing, while earnings declined, according to an earnings report.

Highlights include:

• Net sales in the quarter, both as reported and organic, increased 6% from $1.87 billion in Q4 2021 to $1.99 billion for the quarter ending July 31, 2022. The impact of inflation-driven pricing and sales allowances of 14% more than offset volume declines of 4% and increased promotional spending of 3%.
• Net earnings fell from $288 million to $96 million in the comparative quarters.
• Earnings per share decreased from 95 cents to 32 cents, while adjusted EPS increased 8% to 56 cents.
• Meals and beverages sales increased 6%. Organic net sales, which exclude the impact of currency, increased 7% driven by increases in U.S. soup and gains in foodservice and Prego pasta sauces. Inflation-driven pricing and sales allowances were partially offset by volume declines and increased promotional spending.
• Sales of U.S. soup increased 6% due to gains in ready-to-serve soups and condensed soups, partially offset by declines in broth.
• Snacks sales increased due to increases in salty snacks, primarily Kettle Brand and Cape Cod potato chips, as well as in cookies and crackers, primarily Goldfish crackers. Inflation-driven pricing and sales allowances were partially offset by increased promotional spending and volume declines.

Shares traded at $48.72 today against a 52-week range of $39.76-$51.95.

The $1.99 billion in quarterly revenue beat analyst expectations by $10 million, while the non-GAAP EPS of 56 cents was in line with expectations, according to Seeking Alpha.

"During fiscal 2022, we demonstrated a significant step up in execution across the company with improved supply chain performance and effective revenue management to counter inflation," Mark Clouse, Campbell's president and CEO, said in a press release.

Following a strong finish to fiscal 2022, Campbell is providing full-year fiscal 2023 guidance reflecting the expectation for continued elevated consumer demand for its brand portfolio.

The company is expecting a 4% to 6% increase in net sales for 2023 and adjusted EPS gain of zero to 4%, or $2.85 to $2.95.