Campbell Soup Co. (CPB) reported on Wednesday a profit for the second quarter that declined 13 percent from last year, hurt by industry-wide inflation and supply constraints. Adjusted earnings for the quarter met analysts’ estimates, while annual net sales missed them. The company also reaffirmed its financial guidance for the full-year 2022.
“As expected, our second quarter was challenging as we lapped a difficult comparison and navigated labor and supply constraints, made even tougher by the Omicron surge,” said Mark Clouse, Campbell’s President and CEO.
For the second quarter, the company reported net earnings attributable to the company of $212 million or $0.70 per share, lower than $245 million or $0.80 per share in the prior-year quarter.
Excluding special items, adjusted earnings for the quarter was $0.69 per share, compared to $0.82 per share in the year-ago quarter.
Net sales for the quarter declined 3 percent to $2.21 billion from $2.28 billion in the same quarter last year. Organic net sales decreased 2 percent, excluding the impact from the sale of the Plum baby food and snacks business.
On average, analysts polled by Thomson Reuters expect the company to report earnings of $0.69 per share on net sales of $2.24 billion for the quarter. Analysts’ estimates typically exclude special items.
Meals & Beverages net sales decreased 3 percent to $1.28 billion from last year, driven by declines in U.S. retail, including U.S. soup and Campbell’s pasta, as well as in Canada, partially offset by gains in foodservice.
Snacks net sales also declined 3 percent to $934 million from last year, due to declines in non-core businesses and in certain salty snacks, primarily Late July snacks, partially offset by gains in Goldfish crackers.
Looking ahead to fiscal 2022, the company continues to project adjusted earnings in the range of $2.75 to $2.85 per share on net sales between a decline of 2.0 percent and flat from last year’s net sales of $8.48 billion, implying sales between $8.31 billion and $8.48 billion, with organic net sales between a decline of 1.0 percent and a growth of 1.0 percent.
The Street is looking for earnings of $2.79 per share on net sales of $8.40 billion for the year.
The company said its full-year guidance reflects expected continued strong demand for the balance of the year with steady supply recovery and improved service levels particularly in the fourth quarter as labor recovers. However, core inflation is now expected to be low double-digits for the full year.
The company noted that year-over-year second half financial performance is expected to improve as recent pricing actions will be fully reflected in market with better mitigation of inflation with pricing, and strong levels of demand, while supply and labor conditions improve.
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