Vending

Campbell Soup posts Q1 2022 sales, earnings declines

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December 8, 2021

Campbell Soup Co. reported a decline in sales and earnings for Q1 2022 compared to the prior year's quarter due to cycling of year ago retailer inventory replenishment and industry-wide supply chain disruptions, according to an earnings release.

Net sales in the quarter, both reported and organic, decreased 4% from $2.34 billion in Q1 2021 to $2.24 billion for Q1 2022 ending Oct. 31, 2021. Pricing and sales allowances had a favorable 4% impact on net sales, however, this was more than offset by a 6% decrease in volume and mix as a result of cycling retailer inventory recovery in the prior-year quarter and supply pressures, as well as some promotional spending.

Net earnings declined from $309 million to $261 million in the comparative quarters.

GAAP earnings per share declined 16% from $1.02 to 86 cents while adjusted EPS fell 12% from $1.02 to 89 cents in the comparative quarters.

Net sales for snacks in the quarter, both reported and organic, decreased 1% from $977 million to $970 million as favorable price and sales allowances were more than offset by volume declines and increased promotional spending compared to moderated levels in the prior-year quarter.

Net sales for meals and beverages decreased 7% from $1.46 billion to $1.26 billion. Organic net sales decreased 6% as favorable price and sales allowances in the quarter were more than offset by volume declines across U.S. retail products, including V8 beverages, Prego pasta sauces, and U.S. soup, as well as in Canada.

The $2.24 billion in quarterly revenue missed analyst expectations by $40 million while the non-GAAP EPS of 89 cents beat expectations by 8 cents and the GAAP EPS of 86 cents beat expectations by 5 cents, according to Seeking Alpha.

Sales traded at $41.26 today against a 52-week range of $39.76-$53.77.

"We are pleased with our first-quarter results as consumer demand for our brands remained elevated, and pricing paired with productivity moderated inflation driven margin pressure," Mark Clouse, president and CEO, said in the press release. "Topline was tempered by the expected cycling of year ago of retailer inventory replenishment and some industry-wide supply chain disruptions. We expect the steps we are taking to continue to address labor challenges, drive net price realization and improve productivity will lead to solid year-over-year earnings growth in the second half allowing us to maintain our full-year fiscal 2022 guidance."

Second quarter top-line performance is expected to sequentially improve year-over-year despite lapping strong prior-year results, as supply begins to recover. Also in the second quarter, with respect to margin, the company expects continued pressure driven by additional core inflation across commodities and higher labor-related costs, without the benefit of a second wave of pricing, which will not be in place until the end of the second quarter.