Campbell Soup Co. (CPB) reported on Thursday a profit for the fourth quarter that plunged from last year, hurt by higher costs and expenses amid industry-wide inflation and supply constraints. Both adjusted earnings per share and net sales for the quarter met analysts’ estimates. The company also initiated financial guidance for the full-year 2023.
“During fiscal 2022, we demonstrated a significant step up in execution across the company with improved supply chain performance and effective revenue management to counter inflation,” said Mark Clouse, Campbell’s President and CEO.
For the fourth quarter, the company reported net earnings attributable to the company of $96 million or $0.32 per share, sharply lower than $288 million or $0.95 per share in the prior-year quarter.
Excluding special items, adjusted earnings for the quarter was $0.56 per share, compared to $0.52 per share in the year-ago quarter.
Net sales for the quarter grew 6 percent to $1.99 billion from $1.87 billion in the same quarter last year. Organic net sales also increased 6 percent.
On average, analysts polled by Thomson Reuters expect the company to report earnings of $0.56 per share on net sales of $1.99 billion for the quarter. Analysts’ estimates typically exclude special items.
The sales growth was driven by the impact of inflation-driven pricing and sales allowances of 14 percent, which more than offset volume declines of 4 percent and increased promotional spending of 3 percent.
Meals & Beverages net sales increased 6 percent to $935 million from last year, driven by increases in U.S. soup and gains in foodservice and Prego pasta sauces.
Snacks net sales also grew 6 percent to $1.05 billion from last year, increases in salty snacks, primarily Kettle Brand and Cape Cod potato chips, as well as in cookies and crackers, primarily Goldfish crackers.
Looking ahead, the company expects continued elevated consumer demand for its brand portfolio, with sales growth in both divisions. It added that productivity improvements and cost savings initiatives will continue to play an important role in mitigating inflation, which is expected to remain elevated.
For fiscal 2023, the company now projects adjusted earnings in the range of $2.85 to $2.95 per share on net sales growth of 4 to 6 percent from fiscal 2022 net sales of $8.56 billion, implying net sales between $8.90 billion and $9.07 billion, with organic net sales growth of 4 to 6 percent.
The Street is looking for earnings of $2.92 per share on net sales growth of 2.9 percent to $8.79 billion for the year.
Campbell noted that it remains on track to deliver savings of $1 billion by the end of fiscal 2025 under its multi-year cost savings program.
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