In an August 29^th release, Campbell Soup Company (CPB) released financial results for Q4 and Fiscal 2024 ending July 28^th 2024. 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 market with reduced costs frugal consumers still favor less expensive private brands. The trend to eat-at-home may benefit Campbell Soup and competitors.

For Q4 FY 2024, net loss was $(3 million) on net revenue of $2,293 million with a diluted EPS of $(0.01).  Comparable figures for Q4 FY 2023 ending July 30^th 2023 were net income of $169 million on net revenue of $2,068 million with a diluted EPS of $0.57

For Q4 FY 2024 (with the values for the corresponding quarter of FY 2023 in parentheses), Campbell Soup achieved a gross margin of 29.4 percent (31.7 percent) and an operating margin of 4.3 percent (13.2 percent).  The disparity was due to $181 million in “other expenses” incurred during the most recent quarter. Revenue was up 10.9 percent.

The release included results for the two operating segments:-

• Meals and Beverages: Operating profit of $211 million up 59.8 percent from Q4 2023, on revenue of $1,200 million, up 28.2 percent from Q4 2023
• Snacks: Operating profit of $159 million, up one percent, on revenue of $1,093 million, but down three percent from Q4 2023

For FY 2024 net income was $567 million on revenue of $9,636 million with a diluted EPS of $1.89. This compares to FY 2023 with an income of $848 million on revenue of $9,357 and a diluted EPS of $2.85.

In commenting on Q2 results Mark Clouse CEO stated, “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,” He added “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. We’ve also advanced our Snacks margin journey, while delivering significant innovation and improved sales and marketing capabilities.

He concluded “All of this provides continued confidence in our ability to deliver sequential progress in fiscal 2025 as we continue to navigate the steady and ongoing recovery in the industry”.

To reflect the current and future product range the Company will delete the “Soup” in its name to become the Campbell’s Company.

Guidance for FY 2024 was adjusted upwards. Values included net sales growth ranging from 9.0 to 11.0 percent; an adjusted increase in EBIT of 9.0 to 11.0 percent and an adjusted EPS of between $3.12 and $3.22.  

On July 28^th Campbell Soup listed assets of $15,235 million, including a disproportionate  $9,793 million as goodwill and intangibles. Long-term debt and other obligations amounted to $5,761 million, up 28.1 percent from July 30^th 2023.

The Company had an intraday market capitalization of $14,860 million on September 13^th. CPB trades with a forward P/E of 15.5 and has ranged over a 52-week period from $37.94 to $52.91 with a 50-day moving average of $48.51. Insiders hold 35.5 percent of equity with 8.7 percent of the float short on August 30^th.

Twelve-month trailing operating and profit margins were 12.4 percent and 5.9 percent respectively. The Company generated a twelve-month trailing return of 6.4 percent on assets and 15.2 percent on equity.