In This Article:
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Net Sales Growth: 9% increase, driven by Sovos acquisition.
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Organic Net Sales: Decreased 2% due to weaker snacking categories.
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Adjusted EBIT: Increased 2% year-over-year.
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Adjusted EPS: $0.74, an 8% decline due to higher interest expenses.
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Snacks Division Organic Net Sales: Declined 3% with a 1% decline in leadership brand consumption.
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Meals and Beverages Organic Net Sales: Declined 1% with a 1% volume and mix growth.
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Adjusted Gross Profit Margin: Declined 100 basis points.
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Operating Cash Flow: $737 million year-to-date, an 8% increase.
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Capital Expenditures: $211 million year-to-date.
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Net Debt to Adjusted EBITDA Ratio: 3.7 times.
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Full Year Guidance - Organic Net Sales: Expected to be down 2% to flat.
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Full Year Guidance - Adjusted EPS: Expected range of $2.95 to $3.05.
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Cost Savings Program: $65 million delivered year-to-date, with full-year expectations increased to $120 million.
Release Date: March 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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The Campbell's Co (NASDAQ:CPB) reported a 9% growth in net sales, driven by the contribution from the Sovos acquisition.
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The company's meals and beverages division showed consistent performance with a 1% increase in dollar consumption.
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Rao's sauce delivered high single-digit net sales growth in the second quarter and low teens growth for the first half.
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The Campbell's Co (NASDAQ:CPB) achieved approximately $65 million in cost savings under its $250 million cost savings program.
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The company maintained a strong cash flow generation with $737 million in operating cash flow year to date.
Negative Points
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The anticipated recovery of some snacks categories did not materialize, leading to a softer top line.
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Snacks margin fell short of expectations due to unfavorable mix and operational headwinds in the fresh bakery business.
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Organic net sales decreased by 2%, driven by weaker-than-anticipated snacking categories.
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Adjusted EPS declined 8% to $0.74 due to higher interest expense from increased debt levels.
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The company revised its full-year guidance downward due to slower-than-anticipated recovery in snacking categories.
Q & A Highlights
Q: Mick, as we think about the fiscal second half, what actions are specifically driving the lower profit outlook, and does the revised guidance give the company enough room to get snacks back on track? Also, has the net price headwind to organic sales changed with the new guidance? A: Mick Beekhuizen, President & CEO: The revised guidance reflects a broader operating environment where snacking categories didn't improve as anticipated, particularly in cookies and crackers. We expect sequential improvement in snacks margin but not to the previously communicated levels. The guidance assumes stabilization in snacks by Q4. Carrie Anderson, CFO: We expect promotions to be less of a headwind in the second half, and the guidance supports necessary promotional investments.