Campbell Reports Third-Quarter Fiscal 2024 Results
-
Completed the acquisition of
Sovos Brands, Inc. (Sovos Brands ) onMarch 12, 2024 . -
Net Sales were$2.4 billion , increasing 6%, and were comparable to prior year on an organic basis. On a two-year-compound annual growth rate (CAGR), net sales increased 5% and organic net sales increased 2%. -
Earnings Before Interest and Taxes (EBIT) were
$248 million ; Adjusted EBIT was$354 million , an increase of 13% including the impact of the acquisition. -
Earnings Per Share (EPS) were
$0.44 ; Adjusted EPS were$0.75 , increasing 10%. -
Updates full-year fiscal 2024 guidance to include
Sovos Brands .
CEO Comments
“We delivered a solid third quarter with sequential volume improvement, stable organic net sales, double-digit adjusted EBIT and adjusted EPS growth,” said Campbell’s President and CEO,
|
Three Months Ended |
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Nine Months Ended |
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($ in millions, except per share) |
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% Change |
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% Change |
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As Reported (GAAP) |
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6% |
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1% |
Organic |
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—% |
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(1)% |
Earnings Before Interest and Taxes (EBIT) |
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|
As Reported (GAAP) |
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(2)% |
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(11)% |
Adjusted |
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13% |
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—% |
Diluted Earnings Per Share |
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As Reported (GAAP) |
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(17)% |
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(17)% |
Adjusted |
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10% |
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(2)% |
Note: A detailed reconciliation of the reported (GAAP) financial information to the adjusted financial information is included at the end of this news release. |
Items Impacting Comparability
The table below presents a summary of items impacting comparability in each period. A detailed reconciliation of the reported (GAAP) financial information to the adjusted information is included at the end of this news release.
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Diluted Earnings Per Share |
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Three Months Ended |
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Nine Months Ended |
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As Reported (GAAP) |
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Costs associated with cost savings and optimization initiatives |
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Costs associated with acquisition |
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$— |
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$— |
Commodity mark-to-market adjustments |
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|
|
|
Accelerated amortization |
|
|
$— |
|
|
|
$— |
Plum litigation expenses |
$— |
|
$— |
|
|
|
$— |
Cybersecurity incident costs |
$— |
|
$— |
|
|
|
$— |
Pension actuarial losses (gains) |
$— |
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$— |
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Adjusted* |
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*Numbers may not add due to rounding. |
Third-Quarter Results
Net sales in the quarter increased 6% driven by the benefit from
Gross profit increased to
Marketing and selling expenses, which represented approximately 9% of net sales, increased 6% to
Administrative expenses increased 25% to
Other expenses were
As reported EBIT decreased to
Net interest expense increased 43% to
As reported EPS were
Nine-Month Results
Net sales increased 1% driven by the benefit of the recent
As reported EBIT decreased 11% to
Net interest expense increased 17% to
As reported EPS decreased to
Cash flow from operations was
Cost Savings Program from Continuing Operations
Through the third quarter, Campbell has delivered
Additionally, the company achieved
Full-Year Fiscal 2024 Guidance:
The company is updating its fiscal 2024 full-year guidance previously provided on
Full-year reported net sales growth is expected to be in the range of 3% to 4% driven by the incremental impact of the
Full-year adjusted EBIT growth for the combined business is expected to be approximately 6.5% to 7% reflecting the partial year contribution of the acquisition, inclusive of integration savings, as well as base business performance including lower adjusted marketing and selling expenses and favorable price realization, productivity and cost savings more than offsetting inflation and other supply chain costs.
Full-year adjusted earnings per share growth for the combined business is expected to be approximately 2% to 3% to
The company expects to build momentum into the fourth quarter, with continued stabilization of year-over-year volume growth, double-digit growth of both fourth quarter adjusted EBIT and adjusted earnings per share, and continued momentum on the integration of
Other additional guidance assumptions can be found in the accompanying investor presentation available at investor.campbellsoupcompany.com/events-and-presentations.
The full-year fiscal 2024 guidance is set forth in the table below:
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FY2023
|
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Previous
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Updated FY2024
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($ in millions, except per share) |
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(0.5)% to +1.5% |
|
+3% to +4% |
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Organic |
|
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0% to +2% |
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(1)% to 0% |
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|
||||
Adjusted EBIT2 |
|
|
+3% to +5% |
|
+6.5% to +7% |
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||||
Adjusted EPS2 |
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|
+3% to +5% |
|
+2% to +3% |
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* Adjusted - refer to the detailed reconciliation of the reported (GAAP) financial information to the adjusted financial information at the end of this news release. |
1 Growth rate adjusted for the Emerald nuts business, which was divested on |
2 Adjusted EBIT in fiscal 2023 included approximately |
Note: A non-GAAP reconciliation is not provided for fiscal 2024 guidance as the company is unable to reasonably estimate the full-year financial impact of items such as actuarial gains or losses on pension and postretirement plans because these impacts are dependent on future changes in market conditions. The inability to predict the amount and timing of these future items makes a detailed reconciliation of these forward-looking financial measures impracticable. |
Segment Operating Review
An analysis of net sales and operating earnings by reportable segment follows:
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Three Months Ended |
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($ in millions) |
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|
Meals & Beverages |
|
Snacks |
|
Total* |
|
|
|
|
|
|
|
|
|
|
|
|
Volume/Mix |
1% |
|
(1)% |
|
—% |
Net Price Realization |
(1)% |
|
—% |
|
—% |
Organic |
—% |
|
(1)% |
|
—% |
Currency |
—% |
|
—% |
|
—% |
Acquisition / (Divestiture)1 |
15% |
|
(1)% |
|
7% |
% Change vs. Prior Year |
15% |
|
(2)% |
|
6% |
|
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|
|
|
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Segment Operating Earnings |
|
|
|
|
|
% Change vs. Prior Year |
26% |
|
(7)% |
|
|
*Numbers may not add due to rounding.
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|
Nine Months Ended |
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($ in millions) |
||||
|
Meals & Beverages |
|
Snacks* |
|
Total* |
|
|
|
|
|
|
|
|
|
|
|
|
Volume/Mix |
(3)% |
|
(2)% |
|
(2)% |
Net Price Realization |
1% |
|
3% |
|
2% |
Organic |
(2)% |
|
—% |
|
(1)% |
Currency |
—% |
|
—% |
|
—% |
Acquisition / (Divestiture)1 |
4% |
|
(1)% |
|
2% |
% Change vs. Prior Year |
2% |
|
(1)% |
|
1% |
|
|
|
|
|
|
Segment Operating Earnings |
|
|
|
|
|
% Change vs. Prior Year |
—% |
|
1% |
|
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*Numbers may not add due to rounding.
|
Meals & Beverages
Net sales in the quarter increased 15% driven by the benefit of the
Operating earnings in the quarter increased 26%, primarily driven by the contribution of the acquisition, higher gross profit and lower marketing and selling expenses in the base business. Gross profit margin increased due to supply chain productivity improvements, favorable volume / mix and the benefit of cost savings initiatives, partially offset by higher cost inflation and other supply chain costs, unfavorable net price realization and the impact of the recent acquisition.
Snacks
Net sales in the quarter decreased 2%. Excluding the impact from the divestiture of the Emerald nuts business, organic net sales decreased 1% driven by declines in third-party partner brands, contract manufacturing, frozen products and fresh bakery, partially offset by higher net sales of its 8 power brands, which were up 2%. Sales of power brands benefited from growth in cookies and crackers, primarily Goldfish crackers, and in salty snacks. Volume / mix was slightly unfavorable by 1% and net price realization was neutral. On a two-year CAGR basis, Snacks net sales, reported and organic, grew approximately 5% and 6%, respectively.
Operating earnings in the quarter decreased 7% primarily due to lower gross profit. Gross profit margin decreased due to higher cost inflation and other supply chain costs and unfavorable volume / mix, partially offset by supply chain productivity improvements and the benefit of cost savings initiatives.
Corporate
Corporate expense was
Corporate expense in the current quarter included the following:
-
$77 million of costs associated with the acquisition; -
$23 million of costs related to cost savings and optimization initiatives; -
$6 million of accelerated amortization; and -
$13 million of unrealized mark-to-market gains on outstanding undesignated commodity hedges.
Corporate expense in the third quarter of fiscal 2023 included:
-
$27 million of costs related to cost savings initiatives; -
$17 million of pension actuarial losses; and -
$9 million of unrealized mark-to-market losses on outstanding undesignated commodity hedges.
After factoring in these items, the remaining decrease in Corporate expense was primarily due to lower general and administrative expenses.
Conference Call and Webcast
Campbell will host a conference call to discuss these results today at
Reportable Segments
Meals & Beverages, which consists of our soup, simple meals and beverage products in retail and foodservice in
Snacks, which consists of
About Campbell
For more than 150 years, Campbell (NYSE:CPB) has been connecting people through food they love. Generations of consumers have trusted us to provide delicious and affordable food and beverages. Headquartered in
Forward-Looking Statements
This release contains “forward-looking statements” that reflect the company’s current expectations about the impact of its future plans and performance on the company’s business or financial results. These forward-looking statements, including any statements made regarding sales, EBIT and EPS guidance, rely on a number of assumptions and estimates that could be inaccurate, and which are subject to risks and uncertainties. The factors that could cause the company’s actual results to vary materially from those anticipated or expressed in any forward-looking statement include: the risk that the cost savings and any other synergies from the
CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (millions, except per share amounts) |
||||||||
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
Net sales |
|
$ |
2,369 |
|
|
$ |
2,229 |
|
Costs and expenses |
|
|
|
|
||||
Cost of products sold |
|
|
1,637 |
|
|
|
1,561 |
|
Marketing and selling expenses |
|
|
206 |
|
|
|
194 |
|
Administrative expenses |
|
|
208 |
|
|
|
167 |
|
Research and development expenses |
|
|
27 |
|
|
|
24 |
|
Other expenses / (income) |
|
|
30 |
|
|
|
23 |
|
Restructuring charges |
|
|
13 |
|
|
6 |
||
Total costs and expenses |
|
|
2,121 |
|
|
|
1,975 |
|
Earnings before interest and taxes |
|
|
248 |
|
|
|
254 |
|
Interest, net |
|
|
66 |
|
|
|
46 |
|
Earnings before taxes |
|
|
182 |
|
|
|
208 |
|
Taxes on earnings |
|
|
49 |
|
|
|
48 |
|
Net earnings |
|
|
133 |
|
|
|
160 |
|
Net loss attributable to noncontrolling interests |
|
|
— |
|
|
|
— |
|
Net earnings attributable to |
|
$ |
133 |
|
|
$ |
160 |
|
Per share - basic |
|
|
|
|
||||
Net earnings attributable to |
|
$ |
.45 |
|
|
$ |
.54 |
|
Weighted average shares outstanding - basic |
|
|
298 |
|
|
|
299 |
|
Per share - assuming dilution |
|
|
|
|
||||
Net earnings attributable to |
|
$ |
.44 |
|
|
$ |
.53 |
|
Weighted average shares outstanding - assuming dilution |
|
|
300 |
|
|
|
301 |
|
CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (millions, except per share amounts) |
||||||||
|
|
Nine Months Ended |
||||||
|
|
|
|
|
||||
Net sales |
|
$ |
7,343 |
|
|
$ |
7,289 |
|
Costs and expenses |
|
|
|
|
||||
Cost of products sold |
|
|
5,047 |
|
|
|
5,028 |
|
Marketing and selling expenses |
|
|
645 |
|
|
|
612 |
|
Administrative expenses |
|
|
555 |
|
|
|
487 |
|
Research and development expenses |
|
|
76 |
|
|
|
66 |
|
Other expenses / (income) |
|
|
80 |
|
|
|
41 |
|
Restructuring charges |
|
|
17 |
|
|
15 |
||
Total costs and expenses |
|
|
6,420 |
|
|
|
6,249 |
|
Earnings before interest and taxes |
|
|
923 |
|
|
|
1,040 |
|
Interest, net |
|
|
160 |
|
|
|
137 |
|
Earnings before taxes |
|
|
763 |
|
|
|
903 |
|
Taxes on earnings |
|
|
193 |
|
|
|
214 |
|
Net earnings |
|
|
570 |
|
|
|
689 |
|
Net loss attributable to noncontrolling interests |
|
|
— |
|
|
|
— |
|
Net earnings attributable to |
|
$ |
570 |
|
|
$ |
689 |
|
Per share - basic |
|
|
|
|
||||
Net earnings attributable to |
|
$ |
1.91 |
|
|
$ |
2.30 |
|
Weighted average shares outstanding - basic |
|
|
298 |
|
|
|
299 |
|
Per share - assuming dilution |
|
|
|
|
||||
Net earnings attributable to |
|
$ |
1.91 |
|
|
$ |
2.29 |
|
Weighted average shares outstanding - assuming dilution |
|
|
299 |
|
|
|
301 |
|
CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited) (millions, except per share amounts) |
|||||||||
|
Three Months Ended |
|
|
||||||
|
|
|
|
Percent
|
|||||
Sales |
|
|
|
|
|
||||
Contributions: |
|
|
|
|
|
||||
Meals & Beverages |
$ |
1,272 |
|
|
$ |
1,108 |
|
|
15% |
Snacks |
|
1,097 |
|
|
|
1,121 |
|
|
(2)% |
Total sales |
$ |
2,369 |
|
|
$ |
2,229 |
|
|
6% |
Earnings |
|
|
|
|
|
||||
Contributions: |
|
|
|
|
|
||||
Meals & Beverages |
$ |
229 |
|
|
$ |
182 |
|
|
26% |
Snacks |
|
167 |
|
|
|
179 |
|
|
(7)% |
Total operating earnings |
|
396 |
|
|
|
361 |
|
|
10% |
Corporate income (expense) |
|
(135 |
) |
|
|
(101 |
) |
|
|
Restructuring charges |
|
(13 |
) |
|
|
(6 |
) |
|
|
Earnings before interest and taxes |
|
248 |
|
|
|
254 |
|
|
(2)% |
Interest, net |
|
66 |
|
|
|
46 |
|
|
|
Taxes on earnings |
|
49 |
|
|
|
48 |
|
|
|
Net earnings |
|
133 |
|
|
|
160 |
|
|
(17)% |
Net loss attributable to noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
Net earnings attributable to |
$ |
133 |
|
|
$ |
160 |
|
|
(17)% |
Per share - assuming dilution |
|
|
|
|
|
||||
Net earnings attributable to |
$ |
.44 |
|
|
$ |
.53 |
|
|
(17)% |
CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited) (millions, except per share amounts) |
|||||||||
|
Nine Months Ended |
|
|
||||||
|
|
|
|
Percent
|
|||||
Sales |
|
|
|
|
|
||||
Contributions: |
|
|
|
|
|
||||
Meals & Beverages |
$ |
4,058 |
|
|
$ |
3,971 |
|
|
2% |
Snacks |
|
3,285 |
|
|
|
3,318 |
|
|
(1)% |
Total sales |
$ |
7,343 |
|
|
$ |
7,289 |
|
|
1% |
Earnings |
|
|
|
|
|
||||
Contributions: |
|
|
|
|
|
||||
Meals & Beverages |
$ |
763 |
|
|
$ |
762 |
|
|
—% |
Snacks |
|
489 |
|
|
|
482 |
|
|
1% |
Total operating earnings |
|
1,252 |
|
|
|
1,244 |
|
|
1% |
Corporate income (expense) |
|
(312 |
) |
|
|
(189 |
) |
|
|
Restructuring charges |
|
(17 |
) |
|
|
(15 |
) |
|
|
Earnings before interest and taxes |
|
923 |
|
|
|
1,040 |
|
|
(11)% |
Interest, net |
|
160 |
|
|
|
137 |
|
|
|
Taxes on earnings |
|
193 |
|
|
|
214 |
|
|
|
Net earnings |
|
570 |
|
|
|
689 |
|
|
(17)% |
Net loss attributable to noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
Net earnings attributable to |
$ |
570 |
|
|
$ |
689 |
|
|
(17)% |
Per share - assuming dilution |
|
|
|
|
|
||||
Net earnings attributable to |
$ |
1.91 |
|
|
$ |
2.29 |
|
|
(17)% |
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (millions) |
|||||||
|
|
|
|
||||
Current assets |
$ |
2,139 |
|
|
$ |
2,104 |
|
Plant assets, net |
|
2,621 |
|
|
|
2,364 |
|
Intangible assets, net |
|
9,947 |
|
|
|
7,140 |
|
Other assets |
|
536 |
|
|
465 |
||
Total assets |
$ |
15,243 |
|
|
$ |
12,073 |
|
Current liabilities |
$ |
3,457 |
|
|
$ |
2,288 |
|
Long-term debt |
|
5,752 |
|
|
|
4,496 |
|
Other liabilities |
|
2,119 |
|
|
|
1,701 |
|
Total equity |
|
3,915 |
|
|
|
3,588 |
|
Total liabilities and equity |
$ |
15,243 |
|
|
$ |
12,073 |
|
Total debt |
$ |
7,179 |
|
|
$ |
4,759 |
|
Total cash and cash equivalents |
$ |
107 |
|
|
$ |
223 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (millions) |
|||||||
|
Nine Months Ended |
||||||
|
|
|
|
||||
Cash flows from operating activities: |
|
|
|
||||
Net earnings |
$ |
570 |
|
|
$ |
689 |
|
Adjustments to reconcile net earnings to operating cash flow |
|
|
|
||||
Restructuring charges |
|
17 |
|
|
|
15 |
|
Stock-based compensation |
|
80 |
|
|
|
48 |
|
Amortization of inventory fair value adjustment from acquisition |
|
17 |
|
|
|
— |
|
Pension and postretirement benefit expense |
|
5 |
|
|
|
20 |
|
Depreciation and amortization |
|
298 |
|
|
|
284 |
|
Deferred income taxes |
|
13 |
|
|
|
(2 |
) |
Other |
|
103 |
|
|
|
78 |
|
Changes in working capital, net of acquisition |
|
|
|
||||
Accounts receivable |
|
(33 |
) |
|
|
1 |
|
Inventories |
|
102 |
|
|
|
(40 |
) |
Other current assets |
|
(28 |
) |
|
|
(8 |
) |
Accounts payable and accrued liabilities |
|
(180 |
) |
|
|
(123 |
) |
Other |
|
(67 |
) |
|
|
(44 |
) |
Net cash provided by operating activities |
|
897 |
|
|
|
918 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of plant assets |
|
(376 |
) |
|
|
(257 |
) |
Purchases of route businesses |
|
(28 |
) |
|
|
(13 |
) |
Sales of route businesses |
|
33 |
|
|
|
— |
|
Business acquired, net of cash acquired |
|
(2,617 |
) |
|
|
— |
|
Other |
|
1 |
|
|
|
1 |
|
Net cash used in investing activities |
|
(2,987 |
) |
|
|
(269 |
) |
Cash flows from financing activities: |
|
|
|
||||
Short-term borrowings, including commercial paper and delayed draw term loan |
|
4,616 |
|
|
|
2,479 |
|
Short-term repayments, including commercial paper and delayed draw term loan |
|
(4,556 |
) |
|
|
(2,473 |
) |
Long-term borrowings |
|
2,496 |
|
|
|
500 |
|
Long-term repayments |
|
(100 |
) |
|
|
(566 |
) |
Dividends paid |
|
(334 |
) |
|
|
(336 |
) |
|
|
(46 |
) |
|
|
(141 |
) |
|
|
— |
|
|
|
22 |
|
Payments related to tax withholding for stock-based compensation |
|
(46 |
) |
|
|
(19 |
) |
Payments of debt issuance costs |
|
(22 |
) |
|
|
— |
|
Other |
|
— |
|
|
|
(1 |
) |
Net cash provided by (used in) financing activities |
|
2,008 |
|
|
|
(535 |
) |
Effect of exchange rate changes on cash |
|
— |
|
|
|
— |
|
Net change in cash and cash equivalents |
|
(82 |
) |
|
|
114 |
|
Cash and cash equivalents — beginning of period |
|
189 |
|
|
|
109 |
|
Cash and cash equivalents — end of period |
$ |
107 |
|
|
$ |
223 |
|
Reconciliation of GAAP to Non-GAAP Financial Measures
Third Quarter Ended
Organic
Organic net sales are net sales excluding the impact of currency, acquisitions and divestitures. Management believes that excluding these items, which are not part of the ongoing business, improves the comparability of year-to-year results. A reconciliation of net sales as reported to organic net sales follows.
Three Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
|
% Change |
|||||||||||||||||||||||||||
(millions) |
as Reported |
Impact of Currency |
Impact of Acquisition |
Organic |
|
as Reported |
Impact of Divestiture |
Organic |
as Reported |
Organic |
|||||||||||||||||||||
Meals & Beverages |
$ |
1,272 |
|
$ |
— |
|
$ |
(166 |
) |
$ |
1,106 |
|
$ |
1,108 |
$ |
— |
|
$ |
1,108 |
15% |
—% |
||||||||||
Snacks |
|
1,097 |
|
(1 |
) |
|
— |
|
|
1,096 |
|
|
1,121 |
|
(16 |
) |
|
1,105 |
(2)% |
|
(1)% |
||||||||||
Total |
$ |
2,369 |
|
$ |
(1 |
) |
$ |
(166 |
) |
$ |
2,202 |
|
|
$ |
2,229 |
|
$ |
(16 |
) |
$ |
2,213 |
|
6% |
|
—% |
Nine Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
|
|
% Change |
||||||||||||||||||||||||||
(millions) |
as Reported |
Impact of Currency |
Impact of Acquisition |
Organic |
|
as Reported |
Impact of Divestiture |
Organic |
|
as Reported |
Organic |
||||||||||||||||||||
Meals & Beverages |
$ |
4,058 |
|
$ |
3 |
|
$ |
(166 |
) |
$ |
3,895 |
|
|
$ |
3,971 |
|
$ |
— |
|
$ |
3,971 |
|
|
2% |
|
(2)% |
|||||
Snacks |
|
3,285 |
|
(2 |
) |
|
— |
|
|
3,283 |
|
|
3,318 |
|
(46 |
) |
|
3,272 |
|
(1)% |
|
—% |
|||||||||
Total |
$ |
7,343 |
|
$ |
1 |
|
$ |
(166 |
) |
$ |
7,178 |
|
|
$ |
7,289 |
|
$ |
(46 |
) |
$ |
7,243 |
|
|
1% |
|
(1)% |
Three Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
|
|
Two-Year CAGR |
||||||||||||||||||||||||||
(millions) |
as Reported |
Impact of Currency |
Impact of Acquisition |
Organic |
|
as Reported |
Impact of Divestiture |
Organic |
|
as Reported |
Organic |
||||||||||||||||||||
Meals & Beverages |
$ |
1,272 |
|
$ |
8 |
|
$ |
(166 |
) |
$ |
1,114 |
|
|
$ |
1,131 |
|
$ |
— |
|
$ |
1,131 |
|
|
6% |
|
(1)% |
|||||
Snacks |
|
1,097 |
|
(1 |
) |
|
— |
|
|
1,096 |
|
|
999 |
|
(17 |
) |
|
982 |
|
5% |
|
6% |
|||||||||
Total |
$ |
2,369 |
|
$ |
7 |
|
$ |
(166 |
) |
$ |
2,210 |
|
|
$ |
2,130 |
|
$ |
(17 |
) |
$ |
2,113 |
|
|
5% |
|
2% |
Nine Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
|
|
Two-Year CAGR |
||||||||||||||||||||||||||
(millions) |
as Reported |
Impact of Currency |
Impact of Acquisition |
Organic |
|
as Reported |
Impact of Divestiture |
Organic |
|
as Reported |
|
Organic |
|||||||||||||||||||
Meals & Beverages |
$ |
4,058 |
|
$ |
28 |
|
$ |
(166 |
) |
$ |
3,920 |
|
|
$ |
3,672 |
|
$ |
— |
|
$ |
3,672 |
|
|
5% |
|
3% |
|||||
Snacks |
|
3,285 |
|
(3 |
) |
|
— |
|
|
3,282 |
|
|
2,903 |
|
(49 |
) |
|
2,854 |
|
6% |
|
7% |
|||||||||
Total |
$ |
7,343 |
|
$ |
25 |
|
$ |
(166 |
) |
$ |
7,202 |
|
|
$ |
6,575 |
|
$ |
(49 |
) |
$ |
6,526 |
|
|
6% |
|
5% |
Three Months Ended |
|||||||||||||||
|
|
|
|
|
% Change |
||||||||||
(millions) |
as Reported |
Impact of Currency |
Organic |
|
as Reported |
|
as Reported |
Organic |
|||||||
Total |
$ |
2,229 |
$ |
7 |
$ |
2,236 |
|
$ |
2,130 |
|
5% |
5% |
Year Ended |
|||||||||||
|
|
||||||||||
(millions) |
as Reported |
Impact of Divestiture |
Organic FY 2024 Guidance |
||||||||
Meals & Beverages |
$ |
4,907 |
|
$ |
— |
|
$ |
4,907 |
|
||
Snacks |
|
4,450 |
|
(51 |
) |
|
4,399 |
||||
Total |
$ |
9,357 |
|
$ |
(51 |
) |
$ |
9,306 |
|
Items Impacting Earnings
Adjusted Net earnings are net earnings excluding the impact of costs associated with cost savings and optimization initiatives, costs associated with acquisitions, unrealized mark-to-market gains or losses on outstanding undesignated commodity hedges, accelerated amortization, certain litigation expenses, costs related to a cybersecurity incident, actuarial gains or losses on pension and postretirement plans, and gains or losses on divestitures. Management believes that financial information excluding certain items that are not considered to reflect the ongoing operating results, such as those listed below, improves the comparability of year-to-year results. Consequently, management believes that investors may be able to better understand its results excluding these items.
The following items impacted earnings:
(1) |
|
The company has implemented several cost savings initiatives in recent years. In the third quarter of fiscal 2024, the company recorded implementation costs and other related costs of |
|
|
|
|
|
In the second quarter of fiscal 2024, the company began implementation of a new optimization initiative to improve the effectiveness of its Snacks direct-store-delivery route-to-market network. In the third quarter of fiscal 2024, the company recognized |
|
|
|
|
|
In the third quarter of fiscal 2024, the total aggregate impact related to the cost savings and optimization initiatives was |
|
|
|
(2) |
|
In the first quarter of fiscal 2024, the company announced its intent to acquire |
|
|
|
(3) |
|
In the third quarter of fiscal 2024, the company recognized gains in Cost of products sold of |
|
|
|
(4) |
|
In the third quarter of fiscal 2024, the company recorded accelerated amortization expense in Other expenses / (income) of |
|
|
|
(5) |
|
In the nine-month period of fiscal 2024, the company recorded pre- and after-tax litigation expenses in Administrative expenses of |
|
|
|
(6) |
|
In the nine-month period of fiscal 2024, the company recorded costs of |
|
|
|
(7) |
|
In the third quarter of fiscal 2023, the company recognized actuarial losses in Other expenses / (income) of |
|
|
|
(8) |
|
For the year ended |
The following tables reconcile financial information, presented in accordance with GAAP, to financial information excluding certain items:
|
Three Months Ended |
|
|
||||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||
(millions, except per share amounts) |
As reported |
|
Adjustments(a) |
|
Adjusted |
|
As reported |
|
Adjustments(a) |
|
Adjusted |
|
Adjusted Percent Change |
||||||||||||
Gross profit |
$ |
732 |
|
|
$ |
8 |
|
|
$ |
740 |
|
|
$ |
668 |
|
|
$ |
21 |
|
|
$ |
689 |
|
|
7% |
Gross profit margin |
|
30.9 |
% |
|
|
|
|
31.2 |
% |
|
|
30.0 |
% |
|
|
|
|
30.9 |
% |
|
30 pts |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketing and selling expenses |
$ |
206 |
|
|
$ |
(8 |
) |
|
$ |
198 |
|
|
$ |
194 |
|
|
$ |
— |
|
|
$ |
194 |
|
|
2% |
Administrative expenses |
$ |
208 |
|
|
$ |
(52 |
) |
|
$ |
156 |
|
|
$ |
167 |
|
|
$ |
(13 |
) |
|
$ |
154 |
|
|
1% |
Research and development expenses |
$ |
27 |
|
|
$ |
(3 |
) |
|
$ |
24 |
|
|
$ |
24 |
|
|
$ |
(2 |
) |
|
$ |
22 |
|
|
|
Other expenses / (income) |
$ |
30 |
|
|
$ |
(22 |
) |
|
$ |
8 |
|
|
$ |
23 |
|
|
$ |
(17 |
) |
|
$ |
6 |
|
|
|
Restructuring charges |
$ |
13 |
|
|
$ |
(13 |
) |
|
$ |
— |
|
|
$ |
6 |
|
|
$ |
(6 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings before interest and taxes |
$ |
248 |
|
|
$ |
106 |
|
|
$ |
354 |
|
|
$ |
254 |
|
|
$ |
59 |
|
|
$ |
313 |
|
|
13% |
Interest, net |
|
66 |
|
|
|
(2 |
) |
|
|
64 |
|
|
|
46 |
|
|
|
— |
|
|
|
46 |
|
|
39% |
Earnings before taxes |
$ |
182 |
|
|
$ |
108 |
|
|
$ |
290 |
|
|
$ |
208 |
|
|
$ |
59 |
|
|
$ |
267 |
|
|
|
Taxes |
|
49 |
|
|
|
17 |
|
|
|
66 |
|
|
|
48 |
|
|
|
15 |
|
|
|
63 |
|
|
|
Effective income tax rate |
|
26.9 |
% |
|
|
|
|
22.8 |
% |
|
|
23.1 |
% |
|
|
|
|
23.6 |
% |
|
(80) pts |
||||
Net earnings attributable to |
$ |
133 |
|
|
$ |
91 |
|
|
$ |
224 |
|
|
$ |
160 |
|
|
$ |
44 |
|
|
$ |
204 |
|
|
10% |
Diluted net earnings per share attributable to |
$ |
.44 |
|
|
$ |
.30 |
|
|
$ |
.75 |
|
|
$ |
.53 |
|
|
$ |
.15 |
|
|
$ |
.68 |
|
|
10% |
(a) See following tables for additional information. |
|||||||||||||||||||||||||
*The sum of individual per share amounts may not add due to rounding. | |||||||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||
|
|
||||||||||||||||||
(millions, except per share amounts) |
Costs associated with cost savings and optimization initiatives
|
|
Costs associated with acquisition
|
|
Commodity mark-to-market
|
|
Accelerated amortization
|
|
Adjustments |
||||||||||
Gross profit |
$ |
3 |
|
|
$ |
18 |
|
|
$ |
(13 |
) |
|
$ |
— |
|
|
$ |
8 |
|
Marketing and selling expenses |
|
(6 |
) |
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
Administrative expenses |
|
(13 |
) |
|
|
(39 |
) |
|
|
— |
|
|
|
— |
|
|
|
(52 |
) |
Research and development expenses |
|
(1 |
) |
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
Other expenses / (income) |
|
— |
|
|
|
(16 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
(22 |
) |
Restructuring charges |
|
3 |
|
|
|
(16 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13 |
) |
Earnings before interest and taxes |
$ |
20 |
|
|
$ |
93 |
|
|
$ |
(13 |
) |
|
$ |
6 |
|
|
$ |
106 |
|
Interest, net |
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Earnings before taxes |
$ |
20 |
|
|
$ |
95 |
|
|
$ |
(13 |
) |
|
$ |
6 |
|
|
$ |
108 |
|
Taxes |
|
5 |
|
|
|
14 |
|
|
|
(3 |
) |
|
|
1 |
|
|
|
17 |
|
Net earnings attributable to |
$ |
15 |
|
|
$ |
81 |
|
|
$ |
(10 |
) |
|
$ |
5 |
|
|
$ |
91 |
|
Diluted net earnings per share attributable to |
$ |
.05 |
|
|
$ |
.27 |
|
|
$ |
(.03 |
) |
|
$ |
.02 |
|
|
$ |
.30 |
|
*The sum of individual per share amounts may not add due to rounding. |
|||||||||||||||||||
|
Three Months Ended |
||||||||||||||
|
|
||||||||||||||
(millions, except per share amounts) |
Costs associated with cost savings and optimization initiatives
|
|
Commodity mark-to-market
|
|
Pension and postretirement adjustments
|
|
Adjustments |
||||||||
Gross profit |
$ |
12 |
|
|
$ |
9 |
|
|
$ |
— |
|
|
$ |
21 |
|
Administrative expenses |
|
(13 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13 |
) |
Research and development expenses |
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Other expenses / (income) |
|
— |
|
|
|
— |
|
|
|
(17 |
) |
|
|
(17 |
) |
Restructuring charges |
|
(6 |
) |
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
Earnings before interest and taxes |
$ |
33 |
|
|
$ |
9 |
|
|
$ |
17 |
|
|
$ |
59 |
|
Interest, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Earnings before taxes |
$ |
33 |
|
|
$ |
9 |
|
|
$ |
17 |
|
|
$ |
59 |
|
Taxes |
|
9 |
|
|
|
2 |
|
|
4 |
|
|
|
15 |
|
|
Net earnings attributable to |
$ |
24 |
|
|
$ |
7 |
|
|
$ |
13 |
|
|
$ |
44 |
|
Diluted net earnings per share attributable to |
$ |
.08 |
|
|
$ |
.02 |
|
|
$ |
.04 |
|
|
$ |
.15 |
|
*The sum of individual per share amounts may not add due to rounding. |
|||||||||||||||
|
Nine Months Ended |
|
|
||||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||
(millions, except per share amounts) |
As reported |
|
Adjustments(a) |
|
Adjusted |
|
As reported |
|
Adjustments(a) |
|
Adjusted |
|
Adjusted Percent Change |
||||||||||||
Gross profit |
$ |
2,296 |
|
|
$ |
24 |
|
|
$ |
2,320 |
|
|
$ |
2,261 |
|
|
$ |
21 |
|
|
$ |
2,282 |
|
|
2% |
Gross profit margin |
|
31.3 |
% |
|
|
|
|
31.6 |
% |
|
|
31.0 |
% |
|
|
|
|
31.3 |
% |
|
30 pts |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketing and selling expenses |
$ |
645 |
|
|
$ |
(11 |
) |
|
$ |
634 |
|
|
$ |
612 |
|
|
$ |
— |
|
|
$ |
612 |
|
|
4% |
Administrative expenses |
$ |
555 |
|
|
$ |
(90 |
) |
|
$ |
465 |
|
|
$ |
487 |
|
|
$ |
(21 |
) |
|
$ |
466 |
|
|
—% |
Research and development expenses |
$ |
76 |
|
|
$ |
(5 |
) |
|
$ |
71 |
|
|
$ |
66 |
|
|
$ |
(2 |
) |
|
$ |
64 |
|
|
|
Other expenses / (income) |
$ |
80 |
|
|
$ |
(55 |
) |
|
$ |
25 |
|
|
$ |
41 |
|
|
$ |
(26 |
) |
|
$ |
15 |
|
|
|
Restructuring charges |
$ |
17 |
|
|
$ |
(17 |
) |
|
$ |
— |
|
|
$ |
15 |
|
|
$ |
(15 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings before interest and taxes |
$ |
923 |
|
|
$ |
202 |
|
|
$ |
1,125 |
|
|
$ |
1,040 |
|
|
$ |
85 |
|
|
$ |
1,125 |
|
|
—% |
Interest, net |
|
160 |
|
|
|
(2 |
) |
|
|
158 |
|
|
|
137 |
|
|
|
— |
|
|
|
137 |
|
|
15% |
Earnings before taxes |
$ |
763 |
|
|
$ |
204 |
|
|
$ |
967 |
|
|
$ |
903 |
|
|
$ |
85 |
|
|
$ |
988 |
|
|
|
Taxes |
|
193 |
|
|
|
38 |
|
|
|
231 |
|
|
|
214 |
|
|
|
21 |
|
|
|
235 |
|
|
|
Effective income tax rate |
|
25.3 |
% |
|
|
|
|
23.9 |
% |
|
|
23.7 |
% |
|
|
|
|
23.8 |
% |
|
10 pts |
||||
Net earnings attributable to |
$ |
570 |
|
|
$ |
166 |
|
|
$ |
736 |
|
|
$ |
689 |
|
|
$ |
64 |
|
|
$ |
753 |
|
|
(2)% |
Diluted net earnings per share attributable to |
$ |
1.91 |
|
|
$ |
.56 |
|
|
$ |
2.46 |
|
|
$ |
2.29 |
|
|
$ |
.21 |
|
|
$ |
2.50 |
|
|
(2)% |
(a) See following tables for additional information. |
|||||||||||||||||||||||||
*The sum of individual per share amounts may not add due to rounding. | |||||||||||||||||||||||||
|
Nine Months Ended |
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
(millions, except per share amounts) |
Costs associated with cost savings and optimization initiatives
|
|
Costs associated with acquisition
|
|
Commodity mark-to-market
|
|
Accelerated amortization
|
|
Plum litigation expenses
|
|
Cybersecurity incident costs
|
|
Adjustments |
||||||||||||||
Gross profit |
$ |
9 |
|
|
$ |
18 |
|
|
$ |
(5 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
24 |
|
Marketing and selling expenses |
|
(9 |
) |
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
Administrative expenses |
|
(47 |
) |
|
|
(39 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
(1 |
) |
|
|
(90 |
) |
Research and development expenses |
|
(3 |
) |
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
Other expenses / (income) |
|
— |
|
|
|
(35 |
) |
|
|
— |
|
|
|
(20 |
) |
|
|
— |
|
|
|
— |
|
|
|
(55 |
) |
Restructuring charges |
|
(1 |
) |
|
|
(16 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(17 |
) |
Earnings before interest and taxes |
$ |
69 |
|
|
$ |
112 |
|
|
$ |
(5 |
) |
|
$ |
20 |
|
|
$ |
3 |
|
|
$ |
3 |
|
|
$ |
202 |
|
Interest, net |
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Earnings before taxes |
$ |
69 |
|
|
$ |
114 |
|
|
$ |
(5 |
) |
|
$ |
20 |
|
|
$ |
3 |
|
|
$ |
3 |
|
|
$ |
204 |
|
Taxes |
|
17 |
|
|
|
16 |
|
|
|
(1 |
) |
|
|
5 |
|
|
|
— |
|
|
|
1 |
|
|
|
38 |
|
Net earnings attributable to |
$ |
52 |
|
|
$ |
98 |
|
|
$ |
(4 |
) |
|
$ |
15 |
|
|
$ |
3 |
|
|
$ |
2 |
|
|
$ |
166 |
|
Diluted net earnings per share attributable to |
$ |
.17 |
|
|
$ |
.33 |
|
|
$ |
(.01 |
) |
|
$ |
.05 |
|
|
$ |
.01 |
|
|
$ |
.01 |
|
|
$ |
.56 |
|
|
Nine Months Ended |
||||||||||||||
|
|
||||||||||||||
(millions, except per share amounts) |
Costs associated with cost savings and optimization initiatives
|
|
Commodity mark-to-market
|
|
Pension and postretirement adjustments
|
|
Adjustments |
||||||||
Gross profit |
$ |
12 |
|
|
$ |
9 |
|
|
$ |
— |
|
|
$ |
21 |
|
Administrative expenses |
|
(21 |
) |
|
|
— |
|
|
|
— |
|
|
|
(21 |
) |
Research and development expenses |
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Other expenses / (income) |
|
— |
|
|
|
— |
|
|
|
(26 |
) |
|
|
(26 |
) |
Restructuring charges |
|
(15 |
) |
|
|
— |
|
|
|
— |
|
|
|
(15 |
) |
Earnings before interest and taxes |
$ |
50 |
|
|
$ |
9 |
|
|
$ |
26 |
|
|
$ |
85 |
|
Interest, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Earnings before taxes |
$ |
50 |
|
|
$ |
9 |
|
|
$ |
26 |
|
|
$ |
85 |
|
Taxes |
|
13 |
|
|
|
2 |
|
|
6 |
|
|
|
21 |
|
|
Net earnings attributable to |
$ |
37 |
|
|
$ |
7 |
|
|
$ |
20 |
|
|
$ |
64 |
|
Diluted net earnings per share attributable to |
$ |
.12 |
|
|
$ |
.02 |
|
|
$ |
.07 |
|
|
$ |
.21 |
|
(millions, except per share amounts) |
|
Year Ended |
||
Gross profit, as reported |
|
$ |
2,917 |
|
Add: Costs associated with cost savings and optimization initiatives (1) |
|
|
18 |
|
Deduct: Commodity mark-to-market adjustments (3) |
|
|
(21 |
) |
Adjusted Gross profit |
|
$ |
2,914 |
|
Adjusted Gross profit margin |
|
|
31.1 |
% |
Earnings before interest and taxes, as reported |
|
$ |
1,312 |
|
Add: Costs associated with cost savings and optimization initiatives (1) |
|
|
66 |
|
Add: Costs associated with acquisition (2) |
|
|
5 |
|
Deduct: Commodity mark-to-market adjustments (3) |
|
|
(21 |
) |
Add: Accelerated amortization (4) |
|
|
7 |
|
Deduct: Pension and postretirement adjustments (7) |
|
|
(15 |
) |
Add: Divestiture (8) |
|
|
13 |
|
Adjusted Earnings before interest and taxes |
|
$ |
1,367 |
|
Interest, net, as reported |
|
$ |
184 |
|
Adjusted Earnings before taxes |
|
$ |
1,183 |
|
Taxes on earnings, as reported |
|
$ |
270 |
|
Add: Tax benefit from costs associated with cost savings and optimization initiatives (1) |
|
|
16 |
|
Add: Tax benefit from costs associated with acquisition (2) |
|
|
1 |
|
Deduct: Tax expense from commodity mark-to-market adjustments (3) |
|
|
(5 |
) |
Add: Tax benefit from accelerated amortization (4) |
|
|
2 |
|
Deduct: Tax expense from pension and postretirement adjustments (7) |
|
|
(4 |
) |
Adjusted Taxes on earnings |
|
$ |
280 |
|
Adjusted effective income tax rate |
|
|
23.7 |
% |
Net earnings attributable to |
|
$ |
858 |
|
Add: Net adjustment from costs associated with cost savings and optimization initiatives (1) |
|
|
50 |
|
Add: Net adjustment from costs associated with acquisition (2) |
|
|
4 |
|
Deduct: Net adjustment from commodity mark-to-market adjustments (3) |
|
|
(16 |
) |
Add: Net adjustment from accelerated amortization (4) |
|
|
5 |
|
Deduct: Net adjustment from pension and postretirement adjustments (7) |
|
|
(11 |
) |
Add: Net adjustment from divestiture (8) |
|
|
13 |
|
Adjusted Net earnings attributable to |
|
$ |
903 |
|
Diluted net earnings per share attributable to |
|
$ |
2.85 |
|
Add: Net adjustment from costs associated with cost savings and optimization initiatives (1) |
|
|
.17 |
|
Add: Net adjustment from costs associated with acquisition (2) |
|
|
.01 |
|
Deduct: Net adjustment from commodity mark-to-market adjustments (3) |
|
|
(.05 |
) |
Add: Net adjustment from accelerated amortization (4) |
|
|
.02 |
|
Deduct: Net adjustment from pension and postretirement adjustments (7) |
|
|
(.04 |
) |
Add: Net adjustment from divestiture (8) |
|
|
.04 |
|
Adjusted Diluted net earnings per share attributable to |
|
$ |
3.00 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240604769752/en/
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