On December 7th Campbell Soup Company (CPB) reported on Q1 of Fiscal 2023 ending October 30th. The Company is a bellwether for packaged foods, beverages and snacks, subject to pressure from grocery chains, competition and inflation in ingredients, labor and transport.
For Q1 of FY 2023 net earnings were $297 million on sales of $2,575 million with a diluted EPS of $0.99. For comparison, Q1 of Fiscal 2022 ending October 31st, Campbell Soup Company earned $261 million on net sales of $2,575 million with a diluted EPS of $0.86.
Sales increased by 15.2 percent from Q1 2022 to the most recent quarter. Gross margin was unchanged between the quarters at 32.3 percent, denoting effective control of inflation in the price of ingredients and pressure on unit revenue. Operating margin in Q1 2023 was 16.9 percent, fractionally up from 16.8 percent in Q1 2022.
Of the fourth quarter revenue, 56.5 percent was derived from the Meals and Beverages Segment and the remainder from the Snacks Segment. Meals and Beverages contributed 68 percent of operating earnings, down 18 percent from the corresponding quarter in 2022 and with 32 percent from the Snacks Segment, down 20 percent from Q1 2022.
Mark Clouse, CEO - Campbell Soup Company |
In commenting on results Mark Clouse, President and CEO, stated “Our strong first-quarter results reflect our continued success in driving the relevance of our brands and improving our execution across our supply chain," He added "Through a combination of inflation-driven pricing actions and productivity improvements, we have substantially mitigated significant inflationary pressure in the quarter while continuing to provide quality and value to consumers. We are investing in the equity of our brands through effective marketing, delivering robust innovation and deploying efficient capital spending to ensure we continue to fuel improving in-market shares and growth. With the momentum of our strong first-quarter performance and confidence in our strengthened supply chain, we are raising our full-year fiscal 2023 guidance while taking into account the volatile economic environment."
Guidance for FY 2023 included a 7 to 9 percent increase in net sales and a diluted EPS over a range of $2.90 to $ 3.00
On October 30th 2022 Campbell Soup Company posted total assets of $12,177 million including intangibles of $7,160 million. Long- term debt was $3,994 million against a market capitalization of $16,820 million on December 8th. CPB has traded over the past 52 weeks over a range of $41.73 to $57.08 with a 50-day moving average of $50.95 and trades with a forward P/E of 19.4 and a beta of 0.4. Trailing 12-month operating margin was 14.8 percent and profit margin 8.9 percent. The return on assets was 6.8 percent and on equity, 23.7 percent.
Approximately 36 percent of equity is held by insiders with institutions holding 53 percent and with 7 percent of the float short.
On December 6th CPB closed at $52.98 pre-release but closed on December 7th, post-release at $57.07.