Campbell Soup Company (NYSE:CPB) Margin Expands

Campbell Soup Company (NYSE:CPB) stock rose 1.50% (As on September 2, 11:29:38 AM UTC-4, Source: Google Finance) after the company posted better than expected topline for the fourth quarter of FY 22. The adjusted gross margin increased to $622 million from $578 million. Excluding items impacting comparability, adjusted gross margin percentage increased 40 basis points to 31.3% due to the mitigation of on-going inflation with pricing actions, supply chain productivity improvements and cost savings initiatives, partially offset by increased promotional spending and unfavorable volume / mix. The adjusted EBIT increased 5% compared to the prior year to $269 million primarily due to higher adjusted gross margin, partially offset by higher adjusted administrative expenses and lower adjusted other income. Cash flows from operations increased from $1,035 million in the prior year to $1,181 million primarily due to changes in working capital, partially offset by lower cash earnings. Capital expenditures were $242 million compared to $275 million in the prior year. In line with the company’s commitment to return value to its shareholders, the company paid $451 million of cash dividends and repurchased approximately 3.8 million shares of its common stock at an aggregate cost of $167 million. At the end of the fourth quarter, the company had approximately $375 million remaining under the current $500 million strategic share repurchase program and approximately $172 million under its $250 million anti-dilutive share repurchase program.

Moreover, through the fourth quarter, Campbell has achieved $850 million of total savings under its multi-year cost savings program, inclusive of Snyder’s-Lance synergies. Campbell remains on track to deliver savings of $1 billion by the end of fiscal 2025.

CPB in the fourth quarter of FY 22 has reported the adjusted earnings per share of 56 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 56 cents. The company had reported the adjusted revenue growth of 6 percent to $2 billion in the fourth quarter of FY 22, beating the analysts’ estimates for revenue of $1.98 billion. The impact of inflation-driven pricing and sales allowances was of 14% more than offset volume declines of 4% and increased promotional spending of 3%.

For the fiscal 2023, the company expects net sales & organic net sales to grow in the range of 4% to 6%, Adjusted EBIT to grow in the tune of 1% to 5% and adjusted EPS to be in the range of $2.85 to $2.95

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