Companies and Brands
Campbell Soup Earnings Just Don't Taste Right
Published:
Last Updated:
Campbell Soup Co. (NYSE: CPB) released its most recent quarterly earnings results before the markets opened on Tuesday. The firm posted $0.92 in earnings per share (EPS) and $2.16 billion in revenue, versus consensus estimates from Thomson Reuters that called for $0.97 in EPS and $2.17 billion in revenue. The fiscal first-quarter from last year had $1.00 in EPS and $2.2 billion in revenue.
During this quarter, overall sales decreased 2%, driven by a 2% decline in organic sales, reflecting lower volume. Specifically, this was largely due to the performance of Campbell’s Americas Simple Meals and Beverages division, where U.S. soup sales declined by 9%. Consumer takeaway decreased 2% in U.S. soup while significantly lower retailer inventory accounted for the remaining decline.
Gross margin decreased to 36.2% from 38.6%. Excluding items impacting comparability in the current year, adjusted gross margin decreased 2.1 percentage points to 36.5%. As strange as it seems, the rising cost of carrots was a large factor in this margin shift.
In terms of guidance for the 2018 fiscal year, the company expects to see net sales down 2% to flat and EPS to be in the range of $2.95 to $3.02. There are consensus estimates calling for $3.05 in EPS and $7.88 billion in revenue.
On the books, cash and cash equivalents totaled $163 million at the end of the quarter, compared with $290 million in the same period last year.
Denise Morrison, President and CEO, commented:
This was a difficult quarter, particularly for our U.S. soup business. The operating environment remains volatile with a rapidly evolving retailer landscape and competitive activity pressuring the top line. Our bottom line performance was negatively impacted by a lower adjusted gross margin rate due in part to cost inflation, higher carrot costs and escalating transportation and logistics costs following the hurricane season.
Shares of Campbell Soup were last seen down about 7% at $46.56, with a consensus analyst price target of $49.71 and a 52-week range of $45.00 to $64.23.
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
