On August 29, 2024, Campbell Soup Co (CPB, Financial) released its 8-K filing detailing the company's financial performance for the fourth quarter and full fiscal year 2024, which ended on July 28, 2024. Campbell Soup Co, a leading packaged food manufacturer in North America, reported notable achievements and challenges during this period.
Company Overview
Over the past 150-plus years, Campbell Soup has evolved into a leading packaged food manufacturer in North America, with a portfolio that extends beyond its iconic red-and-white labeled canned soup. In fiscal 2023, snacks accounted for half of its revenue (50%), followed by soup (29%), other simple meals (13%), and beverages (8%). Outside its namesake, its brands include Pepperidge Farm, Goldfish, Snyder's of Hanover, Swanson, Pacific Foods, Prego, Pace, V8, and recently acquired Rao's (which closed in March 2024). Nearly 90% of its revenue results from the US and the remainder from Canada and Latin America.
Performance Highlights
For the fourth quarter, Campbell Soup Co reported net sales of $2.3 billion, an 11% increase from the previous year, driven by the acquisition of Sovos Brands. However, on an organic basis, net sales decreased by 1%. Adjusted Earnings Before Interest and Taxes (EBIT) rose by 36% to $329 million, while adjusted Earnings Per Share (EPS) increased by 26% to $0.63, surpassing the analyst estimate of $0.58.
For the full fiscal year 2024, net sales grew by 3% to $9.6 billion, with adjusted EBIT increasing by 6% to $1.5 billion. Adjusted EPS for the year was $3.08, a 3% increase from the previous year, exceeding the annual estimate of $3.07.
Financial Achievements and Challenges
Campbell Soup Co's financial achievements are significant in the consumer packaged goods industry, where maintaining profitability amid rising costs and competitive pressures is challenging. The company's ability to increase adjusted EBIT and EPS highlights its effective cost management and strategic acquisitions.
However, the company faced challenges, including a 72% decrease in reported EBIT for the fourth quarter due to impairment charges and pension adjustments. Additionally, the reported EPS for the quarter was a loss of $0.01, compared to earnings of $0.57 in the previous year.
Income Statement and Balance Sheet Insights
| Metric | Q4 2024 | Q4 2023 | % Change |
|---|---|---|---|
| Net Sales | $2,293 million | $2,068 million | 11% |
| Adjusted EBIT | $329 million | $242 million | 36% |
| Adjusted EPS | $0.63 | $0.50 | 26% |
Key metrics such as net sales, adjusted EBIT, and adjusted EPS are crucial for evaluating the company's performance. The increase in adjusted EBIT and EPS indicates improved operational efficiency and profitability, despite the challenges faced.
CEO Commentary
“We finished fiscal 2024 with solid fourth-quarter performance including sequential volume improvement and margin expansion versus prior year and delivered significant progress against our longer-term strategic plan despite an evolving consumer landscape,” said Campbell’s President and CEO, Mark Clouse. “The strength of the Meals & Beverages recovery, including Soup, was a standout in the quarter as was the competitive advantage of our supply chain. The integration of Sovos Brands is progressing ahead of our expectations, marking a transformative shift in our Meals & Beverages growth trajectory.”
Analysis and Future Outlook
Campbell Soup Co's strategic acquisition of Sovos Brands and its focus on cost savings have positively impacted its financial performance. The company's ability to navigate an evolving consumer landscape and improve its supply chain efficiency is commendable. However, challenges such as impairment charges and increased interest expenses due to higher debt levels need to be addressed.
Looking ahead, Campbell Soup Co has provided full-year fiscal 2025 guidance, anticipating net sales growth of 9% to 11% and adjusted EPS growth of 1% to 4%. The company remains committed to its strategic initiatives and cost-saving measures, which are expected to drive future growth.
For more detailed insights and the complete earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Campbell Soup Co for further details.
