In a June 5^th 2023 release, Campbell Soup Company (CPB) released financial results for the third quarter of Fiscal 2024 ending April 28^th 2023. The Company beat earnings estimates. Campbell Soup Co. 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 a stabilizing inflationary environment consumers are turning to less expensive private brands although the trend to eat-at-home may benefit Campbell Soup and competitors.

For Q3 FY 2024, net income was $133 million on net revenue of $2,369 million with a diluted EPS of $0.44.  Comparable figures for Q3 FY 2023 ending April 30^th 2023 were net income of $160 million on net revenue of $2,229 million with a diluted EPS of $0.53

For Q3 FY 2024 (with the values for the corresponding quarter of FY 2023 in parentheses) Campbell Soup achieved a gross margin of 30.9 percent (30.5 percent) and an operating margin of 11.0 percent (11.5 percent). Revenue was up 6.3 percent.

The release included results for the two operating segments:-

• Meals and Beverages: Operating profit of $229 million up 26 percent from Q3 2023, on revenue of $1,272 million, up 15 percent from Q3 2023
• Snacks: Operating profit of $167 million, down seven percent, on revenue of $1,097 million, down one percent from Q3 2023

Mark Clouse CEO

In commenting on Q2 results Mark Clouse CEO stated, “We delivered a solid third quarter with sequential volume improvement, stable organic net sales, double- digit adjusted EBIT and adjusted EPS growth,” He added “We are excited about the integration of the Sovos Brands business, which already is bringing significant incremental growth to our company as we continue to navigate the pace of consumer recovery.”

Guidance for FY 2024 was adjusted upwards. Values included net sales growth ranging from 3.0 to 4.0 percent; an adjusted increase in EBIT of 6.5 to 7.0 percent and an adjusted EPS of between $3.07 and $3.10.  

Campbell Soup listed assets of $15,243 million, including a disproportionate  $9,947 million as goodwill and intangibles. Long-term debt and other obligations amounted to $5,752 million, up 27.9 percent from Q3 2023.

The Company had an intraday market capitalization of $13,170 million on June 6^th. CPB trades with a forward P/E of 14.0 and has ranged over a 52-week period from $37.94 to $46.97 with a 50-day moving average of $44.67. Insiders held 35.6 percent of equity with 5.7 percent of the float short on May 15^th.

Twelve-month trailing operating and profit margins were 13.2 percent and 7.9 percent respectively. The Company generated a twelve-month trailing return of 6.4 percent on assets and 19.7 percent on equity.