Campbell Soup dips after profit guidance falls slightly short of expectations

Campbell Soup (NYSE:CPB) reported sales in the quarter increased 4.7% to $2.2B in FQ3. Favorable inflation-driven net price realization was partially offset by an expected decline in volume/mix, which was driven by lapping the prior year retailer inventory rebuild as well as lower volume consumption due to elasticities. Organic sales were up 5% during the quarter, driven by favorable inflation-driven net price realization, partially offset by volume/mix declines.

Marketing and selling expenses increased 3% to $194M and represented approximately 9% of net sales. The increase was driven by higher selling expenses, partially offset by increased benefits from cost savings initiatives. Adjusted gross profit margin decreased 60 basis points to 30.9% primarily driven by unfavorable volume/mix, with favorable net price realization and supply chain productivity improvements more than offsetting higher cost inflation and other supply chain costs

Campbell Soup (CPB) said it achieved $880M of total savings under its multi-year cost savings program through FQ3, inclusive of Snyder’s-Lance synergies. CPB remains on track to deliver savings of $1B by the end of fiscal 2025.

Looking ahead, the food giant reaffirmed its prior full-year sales and adjusted EBIT guidance, as well as EPS guidance for $2.95 to $3.00 vs. $3.02 consensus.

Shares of Campbell Soup (CPB) fell 2.35% in premarket action on Wednesday to $49.40.

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