In a March 6^th 2023 release, Campbell Soup Company (CPB) released predictable financial results for the second quarter of Fiscal 2024 ending January 28^th 2023. The Company can be regarded as representative of the manufacturing and packaged food sector with competitors including Post Holdings, Conagra Brands, Treehouse Foods and Kraft-Heinz, all currently under pressure to reduce prices to the major retail and supermarket chains. In an inflationary environment consumers are turning to less expensive private brands although the trend to eat-at-home may benefit Campbell Soup and competitors.

For the second quarter of FY 2024, net income was $203 million on net revenue of $2,456 million with a diluted EPS of $0.68.  Comparable figures for the second quarter of FY 2023 ending January 29^th 2023 were net income of $232 million on net revenue of $2,485 million with a diluted EPS of $0.78

The release included results for the two operating segments:-

• Meals and Beverages: Operating profit of $247 million down one percent from Q2 2023, on revenue of $1,382 million, down two percent from Q2 2023
• Snacks: Operating profit of $161 million, up seven percent, on revenue of $1,074 million, unchanged from Q2 2023

For the second quarter of FY 2024 (with the values for the corresponding quarter of FY 2023 in parentheses) Campbell Soup achieved a gross margin of 31.6 percent (30.5) and an operating margin of 13.0 percent (14.5). Revenue was down 1.1 percent.

In commenting on Q2 results Mark Clouse CEO stated,  “We once again delivered on our commitments, with a sequential improvement in volume trends and year-over-year operating margin expansion in both our Meals & Beverages and Snacks divisions,” He added, “We are excited about the anticipated completion of the acquisition of Sovos Brands which will bring incremental growth to our Meals & Beverages division and continue the transformation of our highly advantaged portfolio."

Guidance for FY 2024 was amended indicating a trend towards the lower end of forecasts. Values included net sales growth ranging from -0.5 to 1.5 percent; an adjusted increase in EBIT of 3 to 5 percent and an adjusted EPS of between $3.09 and $3.15.  

Campbell Soup listed assets of $12,106 million, including a disproportionate  $7,071 million as goodwill and intangibles. Long-term debt and other obligations amounted to $6,119 million, up 9.3 percent from Q2 2023.

The Company had an intraday market capitalization of $12,800 million on March 6^th. CPB trades with a forward P/E of 14.0 and has ranged over a 52-week period from $37.94 to $56.04 with a 50-day moving average of $43.28. Insiders held 35.7 percent of equity with 7.0 percent of the float short on February 15^th.

Twelve-month trailing operating and profit margins were 15.6 percent and 8.6 percent respectively. The Company generated a twelve-month trailing return of 7.0 percent on assets and 22.0 percent on equity.