Campbell Soup Company reported results for its fourth-quarter and full-year fiscal 2022.
For the fourth quarter:
- Net sales and organic net sales increased 6% to $2.0 billion.
- Earnings before interest and taxes (EBIT) decreased to $170 million. Adjusted EBIT increased 5% to $269 million.
- Earnings per share (EPS) from continuing operations decreased to $0.32. Adjusted EPS increased 8% to $0.56.
For the full year:
- Net sales increased 1% and organic net sales increased 2% to $8.6 billion.
- EBIT decreased to $1.2 billion. Adjusted EBIT decreased 4% to $1.3 billion.
- EPS from continuing operations of $2.51. Adjusted EPS of $2.85 compared to $2.86 in the prior year.
“I’m proud of our team for delivering full-year adjusted EPS at the high end of our original fiscal year 2022 guidance range, despite the volatile environment,” Mark Clouse, Campbell’s president and CEO, stated in the announcement. “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. Our solid foundation and momentum will serve us well in fiscal 2023 as we continue to make progress on unlocking Campbell’s full growth potential.”
Segment Operating Review
Meals & Beverages
Net sales in the quarter increased 6%. Organic net sales, which exclude the impact of currency, increased 7% driven by increases in U.S. soup and gains in foodservice and Prego pasta sauces. Inflation-driven pricing and sales allowances were partially offset by volume declines and increased promotional spending. Sales of U.S. soup increased 6% due to gains in ready-to-serve soups and condensed soups, partially offset by declines in broth.
Operating earnings from Meals & Beverages in the quarter increased 18% primarily due to higher gross margin and lower marketing and selling expenses, partially offset by higher administrative expenses. Gross margin percentage improved reflecting the mitigation of on-going inflation with pricing actions and supply chain productivity improvements. Lower volume and unfavorable mix, as well as higher levels of promotional spending, pressured gross margin percentage.
Net sales in the quarter, both reported and organic, increased 6%, driven by sales of power brands which were up 9%. Snacks sales increased due to increases in salty snacks, primarily Kettle Brand and Cape Cod potato chips, as well as in cookies and crackers, primarily Goldfish crackers. Inflation-driven pricing and sales allowances were partially offset by increased promotional spending and volume declines.
Operating earnings from Snacks in the quarter increased 3% primarily due to higher gross margin, partially offset by higher marketing and selling expenses and higher administrative expenses. Gross margin percentage was relatively flat reflecting the mitigation of ongoing inflation with pricing actions, supply chain productivity improvements and cost savings initiatives, partially offset by higher levels of promotional spending, lower volume and unfavorable mix.
Full-year fiscal 2023 guidance
Following a strong finish to fiscal 2022, Campbell is providing full-year fiscal 2023 guidance reflecting the expectation for continued elevated consumer demand for its brand portfolio. With previous pricing actions fully reflected on shelf, and elasticities expected to be slightly above fiscal 2022 levels, the company expects sales growth in both divisions. The company expects improved supply chain execution and disciplined investment in its brands to drive further share recovery. Productivity improvements and cost savings initiatives will continue to play an important role in mitigating inflation, which is expected to remain elevated.