For the fourth quarter:
- Net Sales and Organic Net Sales increased 6% to $2.0
billion.
- Earnings Before Interest and Taxes (EBIT) decreased to $170
million. Adjusted EBIT increased 5% to $269 million.
- Earnings Per Share (EPS) from Continuing Operations decreased
to $0.32. Adjusted EPS increased 8% to $0.56.
For the full year:
- Net Sales increased 1% and Organic Net Sales increased 2% to
$8.6 billion.
- EBIT decreased to $1.2 billion. Adjusted EBIT decreased 4% to
$1.3 billion.
- EPS from Continuing Operations of $2.51. Adjusted EPS of $2.85
compared to $2.86 in the prior year.
Campbell Soup Company (NYSE:CPB) today reported results
for its fourth-quarter and full-year fiscal 2022.
Continuing Operations
Three Months Ended
Twelve Months Ended
($ in millions, except per share)
July 31, 2022
August 1, 2021
% Change
July 31, 2022
August 1, 2021
% Change
Net Sales
As Reported (GAAP)
$1,987
$1,873
6%
$8,562
$8,476
1%
Organic
6%
2%
Earnings Before Interest and Taxes
(EBIT)
As Reported (GAAP)
$170
$411
(59)%
$1,163
$1,545
(25)%
Adjusted
$269
$256
5%
$1,297
$1,356
(4)%
Diluted Earnings Per Share
As Reported (GAAP)
$0.32
$0.95
(66)%
$2.51
$3.30
(24)%
Adjusted
$0.56
$0.52
8%
$2.85
$2.86
—%
Note: A detailed reconciliation
of the reported (GAAP) financial information to the adjusted
financial information is included at the end of this news release.
Prior-year results are adjusted to reflect the exclusion of
unrealized mark-to-market gains and losses on outstanding
undesignated commodity hedges.
CEO Comments “I'm proud of our team for delivering
full-year adjusted EPS at the high end of our original fiscal year
2022 guidance range, despite the volatile environment,” said Mark
Clouse, Campbell’s President and CEO. “During fiscal 2022, we
demonstrated a significant step up in execution across the company
with improved supply chain performance and effective revenue
management to counter inflation. Our solid foundation and momentum
will serve us well in fiscal 2023 as we continue to make progress
on unlocking Campbell's full growth potential.”
Items Impacting Comparability for Continuing Operations
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.
Diluted Earnings Per
Share
Three Months Ended
Twelve Months Ended
July 31, 2022
August 1, 2021
July 31, 2022
August 1, 2021
As Reported (GAAP)
$0.32
$0.95
$2.51
$3.30
Restructuring charges, implementation
costs and other related costs associated with cost savings
initiatives
$0.04
$0.03
$0.08
$0.13
Pension and postretirement adjustments
$0.08
$(0.41)
$0.11
$(0.51)
Commodity mark-to-market adjustments
$0.13
$(0.03)
$0.15
$(0.12)
Loss on debt extinguishment
$—
$—
$0.01
$—
Deferred tax charge
$—
$—
$—
$0.06
Gains associated with divestiture
$—
$(0.01)
$—
$(0.01)
Adjusted*
$0.56
$0.52
$2.85
$2.86
*Numbers may not add due to rounding.
Fourth-Quarter Results from Continuing Operations Net
sales in the quarter, both as reported and organic, increased 6%
versus the prior year to $2.0 billion. The impact of
inflation-driven pricing and sales allowances of 14% more than
offset volume declines of 4% and increased promotional spending of
3%.
Gross margin decreased to $571 million from $587 million in the
prior year. As a percent of sales, gross margin was 28.7% compared
to 31.3% in the prior year. Excluding items impacting
comparability, 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.
Marketing and selling expenses increased 2% to $179 million and
represented approximately 9% of net sales, as planned. The increase
was driven by higher selling expenses, partially offset by lower
advertising and consumer promotion expense.
Administrative expenses increased 12% to $163 million. Excluding
items impacting comparability, adjusted administrative expenses
increased by 10% to $153 million driven by higher incentive
compensation costs, higher benefit-related costs and inflation.
Other expenses were $31 million compared to other income of $168
million in the prior year. Excluding items impacting comparability,
adjusted other income declined to $1 million compared to $14
million in the prior year primarily due to lower pension and
postretirement benefit income.
As reported EBIT decreased to $170 million from $411 million in
the prior year. Excluding items impacting comparability, 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.
Net interest expense was $45 million compared to $47 million in
the prior year primarily due to lower levels of debt in the current
year. The tax rate was 23.2% compared to 20.9% in the prior year.
Excluding items impacting comparability, the adjusted tax rate was
24.1% compared to 23.9% in the prior year.
As reported EPS from continuing operations, which includes
pension and postretirement actuarial gains and losses, decreased to
$0.32 per share compared to $0.95 per share in the prior year.
Excluding items impacting comparability, adjusted EPS from
continuing operations increased $0.04, or 8%, compared to the prior
year to $0.56 primarily reflecting the increase in adjusted EBIT
and lower net interest expense.
Full-Year Results from Continuing Operations Net sales
for the year increased 1% versus the prior year to $8.6 billion.
Organic net sales, which exclude the impact from the sale of the
Plum baby food and snacks business, increased 2% as
inflation-driven pricing and sales allowances were partially offset
by volume declines and increased promotional spending. Volume
declined primarily due to supply constraints due to labor and
materials availability and price elasticities.
As reported EBIT decreased 25% compared to the prior year to
$1.2 billion. Excluding items impacting comparability, adjusted
EBIT decreased 4% to $1.3 billion compared to the prior year,
reflecting lower adjusted gross margin, lower adjusted other income
and higher adjusted administrative expenses, partially offset by
lower adjusted marketing and selling expenses.
Net interest expense was $188 million compared to $209 million
in the prior year. Excluding items impacting comparability in the
current year, adjusted net interest expense decreased 12% from $209
million in the prior year to $184 million reflecting lower levels
of debt in the current year. The tax rate was 22.4% compared to
24.6% in the prior year. Excluding items impacting comparability,
the adjusted tax rate decreased 150-basis points to 22.6% compared
to 24.1% in the prior year primarily due to state tax law
changes.
As reported EPS from continuing operations of $2.51 per share
compared to $3.30 per share in the prior year. Excluding items
impacting comparability, adjusted EPS from continuing operations of
$2.85 per share, compared to $2.86 per share in the prior year,
primarily reflecting the decrease in adjusted EBIT, mostly offset
by lower adjusted net interest expense, a lower adjusted tax rate
and the benefit of lower weighted average diluted shares
outstanding.
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.
Cost Savings Program from Continuing Operations 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.
Full-Year Fiscal 2023 Guidance Following a strong finish
to fiscal 2022, Campbell is providing full-year fiscal 2023
guidance reflecting the expectation for continued elevated consumer
demand for its brand portfolio. With previous pricing actions fully
reflected on shelf, and elasticities expected to be slightly above
fiscal 2022 levels, the company expects sales growth in both
divisions. The company expects improved supply chain execution and
disciplined investment in its brands to drive further share
recovery. Productivity improvements and cost savings initiatives
will continue to play an important role in mitigating inflation,
which is expected to remain elevated. Although the company's
pension plans continue to be well-funded, given the sharp increase
in interest rates and decline in the market value of plan assets,
the company expects pension and postretirement income to decline in
fiscal 2023. The company's guidance includes an estimated pre-tax
headwind of approximately $35 million, or $0.09 per share, in
fiscal 2023 related to lower pension and postretirement benefit
income, representing approximately 3% of both adjusted EBIT and
adjusted EPS growth.
The full-year fiscal 2023 guidance is set forth in the table
below:
Continuing Operations
FY2022 Results
FY2023 Guidance
($ in millions, except per share)
Net Sales
$8,562
+4% to +6%
Organic Net Sales
+4% to +6%
Adjusted EBIT
$1,297
*
+1% to +5%
Adjusted EPS
$2.85
*
0% to +4%
$2.85 to $2.95
* Adjusted - refer to the detailed
reconciliation of the reported (GAAP) financial information to the
adjusted financial information at the end of this news release.
Note: A non-GAAP reconciliation is not provided for fiscal 2023
guidance as the company is unable to reasonably estimate the
full-year financial impact of items such as actuarial gains or
losses on pension and postretirement plans because these impacts
are dependent on future changes in market conditions. The inability
to predict the amount and timing of these future items makes a
detailed reconciliation of these forward-looking financial measures
impracticable.
Segment Operating Review An analysis of net sales and
operating earnings by reportable segment follows:
Three
Months Ended July 31, 2022
($ in millions)
Meals & Beverages
Snacks
Total*
Net Sales, as Reported
$935
$1,052
$1,987
Volume and Mix
(6)%
(3)%
(4)%
Price and Sales Allowances
14%
13%
14%
Promotional Spending
(1)%
(4)%
(3)%
Organic Net Sales
7%
6%
6%
Currency
(1)%
—%
—%
Divestiture
—%
—%
—%
% Change vs. Prior Year
6%
6%
6%
Segment Operating Earnings
$161
$141
% Change vs. Prior Year
18%
3%
*Numbers do not add due to rounding.
Note: A detailed reconciliation of the reported (GAAP) net sales to
organic net sales is included at the end of this news release.
Twelve
Months Ended July 31, 2022
($ in millions)
Meals & Beverages*
Snacks*
Total*
Net Sales, as Reported
$4,607
$3,955
$8,562
Volume and Mix
(6)%
(6)%
(6)%
Price and Sales Allowances
8%
8%
8%
Promotional Spending
(2)%
—%
(1)%
Organic Net Sales
1%
3%
2%
Divestiture
(1)%
—%
(1)%
% Change vs. Prior Year
—%
3%
1%
Segment Operating Earnings
$874
$517
% Change vs. Prior Year
(5)%
1%
*Numbers do not add due to rounding.
Note: A detailed reconciliation of the reported (GAAP) net sales to
organic net sales is included at the end of this news release.
Meals & Beverages Net sales in the quarter increased
6%. Organic net sales, which exclude the impact of currency,
increased 7% driven by increases in U.S. soup and gains in
foodservice and Prego pasta sauces. Inflation-driven pricing and
sales allowances were partially offset by volume declines and
increased promotional spending. Sales of U.S. soup increased 6% due
to gains in ready-to-serve soups and condensed soups, partially
offset by declines in broth.
Operating earnings from Meals & Beverages in the quarter
increased 18% primarily due to higher gross margin and lower
marketing and selling expenses, partially offset by higher
administrative expenses. Gross margin percentage improved
reflecting the mitigation of on-going inflation with pricing
actions and supply chain productivity improvements. Lower volume
and unfavorable mix, as well as higher levels of promotional
spending, pressured gross margin percentage.
Snacks Net sales in the quarter, both reported and
organic, increased 6%, driven by sales of power brands which were
up 9%. Snacks sales increased due to increases in salty snacks,
primarily Kettle Brand and Cape Cod potato chips, as well as in
cookies and crackers, primarily Goldfish crackers. Inflation-driven
pricing and sales allowances were partially offset by increased
promotional spending and volume declines.
Operating earnings from Snacks in the quarter increased 3%
primarily due to higher gross margin, partially offset by higher
marketing and selling expenses and higher administrative expenses.
Gross margin percentage was relatively flat reflecting the
mitigation of on-going inflation with pricing actions, supply chain
productivity improvements and cost savings initiatives, partially
offset by higher levels of promotional spending, lower volume and
unfavorable mix.
Corporate Corporate expense was $127 million in the
fourth quarter of fiscal 2022 compared to income of $137 million in
the prior year. Corporate expense in the fourth quarter of fiscal
2022 included unrealized mark-to-market losses on outstanding
undesignated commodity hedges of $51 million, pension and
postretirement actuarial losses of $32 million and costs of $11
million related to cost savings initiatives. Corporate income in
the fourth quarter of fiscal 2021 included pension and
postretirement actuarial gains of $165 million, unrealized
mark-to-market gains on outstanding undesignated commodity hedges
of $11 million, a loss on divestiture of $11 million and costs of
$10 million related to cost savings initiatives. After factoring in
these items, the remaining Corporate expense of $33 million this
quarter increased from $18 million in the prior year primarily due
to lower pension and postretirement benefit income.
Conference Call and Webcast Campbell will host a
conference call to discuss these results today at 8:00 a.m. Eastern
Time. Participants calling from the U.S. may dial in using the
toll-free phone number (888) 210-3346. Participants calling from
outside the U.S. may dial in using phone number +1 (646) 960-0253.
The conference access code is 2518868. In addition to dial-in,
access to a live audio webcast of the call with accompanying
slides, as well as a replay of the call, will be available at
investor.campbellsoupcompany.com/events-and-presentations. A
recording of the call will also be available until 11:59 p.m. ET on
September 15, 2022, at +1 (647) 362-9199 or 800-770-2030. The
access code for the replay is 2518868.
Reportable Segments Campbell Soup Company earnings
results are reported as follows:
Meals & Beverages, which consists
of our soup, simple meals and beverage products in retail and
foodservice in U.S. and Canada. The segment includes the following
products: Campbell’s condensed and ready-to-serve soups; Swanson
broth and stocks; Pacific Foods broth, soups and non-dairy
beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s
gravies, pasta, beans and dinner sauces; Swanson canned poultry; V8
juices and beverages; and Campbell’s tomato juice. The segment also
includes snacking products in foodservice and Canada. The segment
included the Plum baby food and snacks business, which was sold on
May 3, 2021.
Snacks, which consists of Pepperidge
Farm cookies*, crackers, fresh bakery and frozen products,
including Goldfish crackers*, Snyder’s of Hanover pretzels*, Lance
sandwich crackers*, Cape Cod potato chips*, Kettle Brand potato
chips*, Late July snacks*, Snack Factory pretzel crisps*, Pop
Secret popcorn, Emerald nuts, and other snacking products in retail
in the U.S. We refer to the * brands as our "power brands." The
segment also includes the retail business in Latin America.
About Campbell Soup Company For more than 150 years,
Campbell (NYSE:CPB) has been connecting people through food they
love. Generations of consumers have trusted Campbell to provide
delicious and affordable food and beverages. Headquartered in
Camden, N.J. since 1869, Campbell generated fiscal 2022 net sales
of nearly $8.6 billion. Our portfolio includes iconic brands such
as Campbell’s, Cape Cod, Goldfish, Kettle Brand, Lance, Late July,
Milano, Pace, Pacific Foods, Pepperidge Farm, Prego, Snyder’s of
Hanover, Swanson and V8. Campbell has a heritage of giving back and
acting as a good steward of the environment. The company is a
member of the Standard & Poor's 500 as well as the FTSE4Good
and Bloomberg Gender-Equality Indices. For more information, visit
www.campbellsoupcompany.com or follow company news on Twitter via
@CampbellSoupCo.
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:
(1) impacts of, and associated responses to, the COVID-19 pandemic
on our business, suppliers, customers, consumers and employees; (2)
the company’s ability to execute on and realize the expected
benefits from its strategy, including growing sales in snacks and
growing/maintaining its market share position in soup; (3) the
impact of strong competitive responses to the company’s efforts to
leverage its brand power with product innovation, promotional
programs and new advertising; (4) the risks associated with trade
and consumer acceptance of product improvements, shelving
initiatives, new products and pricing and promotional strategies;
(5) the ability to realize projected cost savings and benefits from
cost savings initiatives and the integration of recent
acquisitions; (6) disruptions in or inefficiencies to the company’s
supply chain and/or operations, including the impacts of the
COVID-19 pandemic; (7) the risks related to the availability of,
and cost inflation in, supply chain inputs, including labor, raw
materials, commodities, packaging and transportation; (8) the risks
related to the effectiveness of the company's hedging activities
and the company's ability to respond to volatility in commodity
prices; (9) the company’s ability to manage changes to its
organizational structure and/or business processes, including
selling, distribution, manufacturing and information management
systems or processes; (10) changes in consumer demand for the
company’s products and favorable perception of the company’s
brands; (11) changing inventory management practices by certain of
the company’s key customers; (12) a changing customer landscape,
with value and e-commerce retailers expanding their market
presence, while certain of the company’s key customers maintain
significance to the company’s business; (13) product quality and
safety issues, including recalls and product liabilities; (14) the
possible disruption to the independent contractor distribution
models used by certain of the company’s businesses, including as a
result of litigation or regulatory actions affecting their
independent contractor classification; (15) the uncertainties of
litigation and regulatory actions against the company; (16) the
costs, disruption and diversion of management’s attention
associated with activist investors; (17) a disruption, failure or
security breach of the company’s or the company's vendors'
information technology systems, including ransomware attacks; (18)
impairment to goodwill or other intangible assets; (19) the
company’s ability to protect its intellectual property rights; (20)
increased liabilities and costs related to the company’s defined
benefit pension plans; (21) the company’s ability to attract and
retain key talent; (22) goals and initiatives related to, and the
impacts of, climate change, including weather-related events; (23)
negative changes and volatility in financial and credit markets,
deteriorating economic conditions and other external factors,
including changes in laws and regulations; (24) unforeseen business
disruptions or other impacts due to political instability, civil
disobedience, terrorism, armed hostilities (including the ongoing
conflict between Russia and Ukraine), extreme weather conditions,
natural disasters, other pandemics or other calamities; and (25)
other factors described in the company’s most recent Form 10-K and
subsequent Securities and Exchange Commission filings. The company
disclaims any obligation or intent to update the forward-looking
statements in order to reflect events or circumstances after the
date of this release.
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF
EARNINGS (unaudited)
(millions, except per share
amounts)
Three Months Ended
July 31, 2022
August 1, 2021
Net sales
$
1,987
$
1,873
Costs and expenses
Cost of products sold
1,416
1,286
Marketing and selling expenses
179
175
Administrative expenses
163
146
Research and development expenses
23
23
Other expenses / (income)
31
(168
)
Restructuring charges
5
—
Total costs and expenses
1,817
1,462
Earnings before interest and taxes
170
411
Interest, net
45
47
Earnings before taxes
125
364
Taxes on earnings
29
76
Earnings from continuing operations
96
288
Earnings from discontinued operations
—
—
Net earnings
96
288
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
96
$
288
Per share - basic
Earnings from continuing operations
attributable to Campbell Soup Company
$
.32
$
.95
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
.32
$
.95
Weighted average shares outstanding -
basic
300
303
Per share - assuming dilution
Earnings from continuing operations
attributable to Campbell Soup Company
$
.32
$
.95
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
.32
$
.95
Weighted average shares outstanding -
assuming dilution
302
304
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF
EARNINGS
(millions, except per share
amounts)
Twelve Months Ended
July 31, 2022
August 1, 2021
Net sales
$
8,562
$
8,476
Costs and expenses
Cost of products sold
5,935
5,665
Marketing and selling expenses
734
817
Administrative expenses
617
598
Research and development expenses
87
84
Other expenses / (income)
21
(254
)
Restructuring charges
5
21
Total costs and expenses
7,399
6,931
Earnings before interest and taxes
1,163
1,545
Interest, net
188
209
Earnings before taxes
975
1,336
Taxes on earnings
218
328
Earnings from continuing
operations
757
1,008
Loss from discontinued
operations
—
(6
)
Net earnings
757
1,002
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
757
$
1,002
Per share - basic
Earnings from continuing operations
attributable to Campbell Soup Company
$
2.51
$
3.33
Loss from discontinued operations
—
(.02
)
Net earnings attributable to Campbell Soup
Company
$
2.51
$
3.31
Weighted average shares outstanding -
basic
301
303
Per share - assuming dilution
Earnings from continuing operations
attributable to Campbell Soup Company
$
2.51
$
3.30
Loss from discontinued operations
—
(.02
)
Net earnings attributable to Campbell Soup
Company*
$
2.51
$
3.29
Weighted average shares outstanding -
assuming dilution
302
305
*The sum of individual per share amounts
may not add due to rounding.
CAMPBELL SOUP COMPANY
CONSOLIDATED SUPPLEMENTAL
SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share
amounts)
Three Months Ended
July 31, 2022
August 1, 2021
Percent
Change
Sales
Contributions:
Meals & Beverages
$
935
$
878
6%
Snacks
1,052
995
6%
Total sales
$
1,987
$
1,873
6%
Earnings
Contributions:
Meals & Beverages
$
161
$
137
18%
Snacks
141
137
3%
Total operating earnings
302
274
10%
Corporate income (expense)
(127
)
137
Restructuring charges
(5
)
—
Earnings before interest and taxes
170
411
(59)%
Interest, net
45
47
Taxes on earnings
29
76
Earnings from continuing operations
96
288
(67)%
Earnings from discontinued operations
—
—
Net earnings
96
288
(67)%
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
96
$
288
(67)%
Per share - assuming dilution
Earnings from continuing operations
attributable to Campbell Soup Company
$
.32
$
.95
(66)%
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
.32
$
.95
(66)%
Beginning in fiscal 2022, the foodservice
and Canadian business formerly included in the Snacks segment is
now managed as part of the Meals & Beverages segment. Segment
results have been adjusted retrospectively to reflect this
change.
CAMPBELL SOUP COMPANY
CONSOLIDATED SUPPLEMENTAL
SCHEDULE OF SALES AND EARNINGS
(millions, except per share
amounts)
Twelve Months Ended
July 31, 2022
August 1, 2021
Percent
Change
Sales
Contributions:
Meals & Beverages
$
4,607
$
4,621
—%
Snacks
3,955
3,855
3%
Total sales
$
8,562
$
8,476
1%
Earnings
Contributions:
Meals & Beverages
$
874
$
922
(5)%
Snacks
517
514
1%
Total operating earnings
1,391
1,436
(3)%
Corporate income (expense)
(223
)
130
Restructuring charges
(5
)
(21
)
Earnings before interest and taxes
1,163
1,545
(25)%
Interest, net
188
209
Taxes on earnings
218
328
Earnings from continuing operations
757
1,008
(25)%
Loss from discontinued operations
—
(6
)
n/m
Net earnings
757
1,002
(24)%
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
757
$
1,002
(24)%
Per share - assuming dilution
Earnings from continuing operations
attributable to Campbell Soup Company
$
2.51
$
3.30
(24)%
Loss from discontinued operations
—
(.02
)
n/m
Net earnings attributable to Campbell Soup
Company*
$
2.51
$
3.29
(24)%
*The sum of individual per share amounts may not add due to
rounding. Beginning in fiscal 2022, the foodservice and
Canadian business formerly included in the Snacks segment is now
managed as part of the Meals & Beverages segment. Segment
results have been adjusted retrospectively to reflect this change.
n/m - not meaningful
CAMPBELL SOUP COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(millions)
July 31, 2022
August 1, 2021
Current assets
$
1,963
$
1,695
Plant assets, net
2,343
2,370
Intangible assets, net
7,177
7,220
Other assets
409
449
Total assets
$
11,892
$
11,734
Current liabilities
$
2,886
$
1,814
Long-term debt
3,996
5,010
Other liabilities
1,677
1,756
Total equity
3,333
3,154
Total liabilities and equity
$
11,892
$
11,734
Total debt
$
4,810
$
5,058
Total cash and cash equivalents
$
109
$
69
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(millions)
Twelve Months Ended
July 31, 2022
August 1, 2021
Cash flows from operating activities:
Net earnings
$
757
$
1,002
Adjustments to reconcile net earnings to
operating cash flow
Restructuring charges
5
21
Stock-based compensation
59
64
Pension and postretirement benefit
income
(7
)
(267
)
Depreciation and amortization
337
317
Deferred income taxes
21
137
Net loss on sale of business
—
11
Loss on extinguishment of debt
4
—
Other
88
86
Changes in working capital, net of
divestiture
Accounts receivable
48
(20
)
Inventories
(314
)
(77
)
Prepaid assets
25
(28
)
Accounts payable and accrued
liabilities
200
(164
)
Other
(42
)
(47
)
Net cash provided by operating
activities
1,181
1,035
Cash flows from investing activities:
Purchases of plant assets
(242
)
(275
)
Purchases of route businesses
(1
)
(2
)
Sales of route businesses
2
10
Sale of business, net of cash divested
—
101
Other
11
8
Net cash used in investing activities
(230
)
(158
)
Cash flows from financing activities:
Short-term borrowings, including
commercial paper
1,173
320
Short-term repayments, including
commercial paper
(997
)
(580
)
Long-term repayments
—
(921
)
Dividends paid
(451
)
(439
)
Treasury stock purchases
(167
)
(36
)
Treasury stock issuances
3
2
Payments related to tax withholding for
stock-based compensation
(18
)
(15
)
Payments related to extinguishment of
debt
(453
)
—
Net cash used in financing activities
(910
)
(1,669
)
Effect of exchange rate changes on
cash
(1
)
2
Net change in cash and cash
equivalents
40
(790
)
Cash and cash equivalents — beginning of
period
69
859
Cash and cash equivalents — end of
period
$
109
$
69
Reconciliation of GAAP to Non-GAAP Financial
Measures Fiscal Year Ended July 31, 2022
Campbell Soup Company (the "company") uses certain non-GAAP
financial measures as defined by the Securities and Exchange
Commission in certain communications. These non-GAAP financial
measures are measures of performance not defined by accounting
principles generally accepted in the United States and should be
considered in addition to, not in lieu of, GAAP reported measures.
Management believes that also presenting certain non-GAAP financial
measures provides additional information to facilitate comparison
of the company's historical operating results and trends in its
underlying operating results, and provides transparency on how the
company evaluates its business. Management uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the company's performance. Management
considers quantitative and qualitative factors in assessing whether
to adjust for the impact of items that may be significant or that
could affect an understanding of the company’s performance and
trends in its underlying operating results. The adjustments on
earnings may include but are not limited to items such as: unusual
or non-recurring gains or charges; restructuring charges and
related costs; actuarial gains or losses on pension and
postretirement plans; gains or losses on the extinguishment of
debt; gains or losses on divestitures; or impairment charges.
Depending upon facts or circumstances, management may change these
adjustments. When these adjustments change, the company will
provide updated definitions of its non-GAAP financial measures.
When items no longer impact the company’s current or future
presentation of non-GAAP operating results, the company will remove
these items from its non-GAAP definitions.
Beginning in fiscal 2022, the company added to the non-GAAP
definition of Adjusted Net earnings the exclusion of unrealized
mark-to-market gains and losses on outstanding undesignated
commodity hedges until such time that the related exposure impacts
its operating results. Since these instruments are used to reduce
the volatility of commodity price fluctuations in future periods,
this adjustment was made to remove the volatility in current
results to facilitate the comparison of the company's historical
operating results and trends in its underlying operating results.
Prior periods presented have been adjusted retrospectively to
reflect this change.
Organic Net Sales 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
July 31, 2022
August 1, 2021
% Change
(millions)
Net Sales,
as
Reported
Impact of Currency
Organic Net Sales
Net Sales,
as
Reported
Net Sales,
as
Reported
Organic Net Sales
Meals & Beverages
$935
$5
$940
$878
6%
7%
Snacks
1,052
—
1,052
995
6%
6%
Total Net Sales
$ 1,987
$5
$1,992
$1,873
6%
6%
Twelve Months Ended
July 31, 2022
August 1, 2021
% Change
(millions)
Net Sales,
as
Reported
Impact of Currency
Organic Net Sales
Net Sales,
as
Reported
Impact of Divestiture
Organic Net Sales
Net Sales,
as
Reported
Organic Net Sales
Meals & Beverages
$4,607
$(2)
$4,605
$4,621
$(68)
$4,553
—%
1%
Snacks
3,955
—
3,955
3,855
—
3,855
3%
3%
Total Net Sales
$8,562
$(2)
$8,560
$8,476
$(68)
$8,408
1%
2%
Items Impacting Earnings
Adjusted Net earnings are net earnings excluding the impact of
restructuring charges and related costs, actuarial gains or losses
on pension and postretirement plans, unrealized mark-to-market
gains or losses on outstanding undesignated commodity hedges,
losses on the extinguishment of debt, a deferred tax charge related
to a legal entity reorganization, 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 from continuing
operations:
(1)
The company has implemented several cost
savings initiatives in recent years.
In the fourth quarter of fiscal 2022, the
company recorded Restructuring charges of $5 million and
implementation costs and other related costs of $10 million in
Administrative expenses and $1 million in Marketing and selling
expenses (aggregate impact of $12 million after tax, or $.04 per
share) related to these initiatives. In the fourth quarter of
fiscal 2021, the company recorded implementation costs and other
related costs of $7 million in Administrative expenses, $2 million
in Cost of products sold, and $1 million in Marketing and selling
expenses (aggregate impact of $8 million after tax, or $.03 per
share) related to these initiatives. In fiscal 2022, the company
recorded Restructuring charges of $5 million and implementation
costs and other related costs of $20 million in Administrative
expenses, $5 million in Cost of products sold and $1 million in
Marketing and selling expenses (aggregate impact of $24 million
after tax, or $.08 per share) related to these initiatives. In
fiscal 2021, the company recorded Restructuring charges of $21
million and implementation costs and other related costs of $28
million in Administrative expenses, $3 million in Cost of products
sold, and $1 million in Marketing and selling expenses (aggregate
impact of $40 million after tax, or $.13 per share) related to
these initiatives.
(2)
In the fourth quarter of fiscal 2022, the
company recognized actuarial losses on pension and postretirement
plans in Other expenses / (income) of $32 million ($24 million
after tax, or $.08 per share). In the fourth quarter of fiscal
2021, the company recognized actuarial gains on pension and
postretirement plans in Other expenses / (income) of $165 million
($126 million after tax, or $.41 per share). In fiscal 2022, the
company recognized actuarial losses on pension and postretirement
plans in Other expenses / (income) of $44 million ($33 million
after tax, or $.11 per share). In fiscal 2021, the company
recognized actuarial gains on pension and postretirement plans in
Other expenses / (income) of $203 million ($155 million after tax,
or $.51 per share).
(3)
In the fourth quarter of fiscal 2022, the
company recognized losses in Cost of products sold of $51 million
($38 million after tax, or $.13 per share) associated with
unrealized mark-to-market adjustments on outstanding undesignated
commodity hedges. In the fourth quarter of fiscal 2021, the company
recognized gains in Cost of products sold of $11 million ($8
million after tax, or $.03 per share) associated with unrealized
mark-to-market adjustments on outstanding undesignated commodity
hedges. In fiscal 2022, the company recognized losses in Cost of
products sold of $59 million ($44 million after tax, or $.15 per
share) associated with unrealized mark-to-market adjustments on
outstanding undesignated commodity hedges. In fiscal 2021, the
company recognized gains in Cost of products sold of $50 million
($38 million after tax, or $.12 per share) associated with
unrealized mark-to-market adjustments on outstanding undesignated
commodity hedges.
(4)
In fiscal 2022, the company recorded a
loss in Interest expense of $4 million ($3 million after tax, or
$.01 per share) on the extinguishment of debt.
(5)
In fiscal 2021, the company recorded a $19
million ($.06 per share) deferred tax charge in connection with a
legal entity reorganization as part of the continued integration of
Snyder's-Lance, Inc.
(6)
In the fourth quarter of fiscal 2021, the
company recorded a loss in Other expenses / (income) of $11 million
(and a gain of $3 million after tax, or $.01 per share) on the sale
of its Plum baby food and snacks business.
The following tables reconcile financial information, presented
in accordance with GAAP, to financial information excluding certain
items:
Three Months Ended
July 31, 2022
August 1, 2021
(millions, except per share amounts)
As reported
Adjustments(a)
Adjusted
As reported
Adjustments(a)
Adjusted
Adjusted Percent
Change
Gross margin
$
571
$
51
$
622
$
587
$
(9
)
$
578
8%
Gross margin percentage
28.7
%
31.3
%
31.3
%
30.9
%
40 pts
Marketing and selling expenses
$
179
$
(1
)
$
178
$
175
$
(1
)
$
174
2%
Administrative expenses
$
163
$
(10
)
$
153
$
146
$
(7
)
$
139
10%
Other expenses / (income)
$
31
$
(32
)
$
(1
)
$
(168
)
$
154
$
(14
)
Restructuring charges
$
5
$
(5
)
$
—
$
—
$
—
$
—
Earnings before interest and taxes
$
170
$
99
$
269
$
411
$
(155
)
$
256
5%
Interest, net
45
—
45
47
—
47
(4)%
Earnings before taxes
$
125
$
99
$
224
$
364
$
(155
)
$
209
Taxes
29
25
54
76
(26
)
50
Effective income tax rate
23.2
%
24.1
%
20.9
%
23.9
%
20 pts
Earnings from continuing operations
$
96
$
74
$
170
$
288
$
(129
)
$
159
7%
Earnings from discontinued operations
—
—
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
96
$
74
$
170
$
288
$
(129
)
$
159
7%
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company*
$
.32
$
.25
$
.56
$
.95
$
(.42
)
$
.52
8%
Diluted earnings per share - discontinued
operations
—
—
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company*
$
.32
$
.25
$
.56
$
.95
$
(.42
)
$
.52
8%
(a)See following tables for additional
information.
*The sum of individual per share amounts may not add due to
rounding.
Three Months Ended
July 31, 2022
(millions, except per share amounts)
Restructuring charges,
implementation costs and other related costs (1)
Pension and postretirement
adjustments (2)
Commodity mark-to- market
(3)
Adjustments
Gross margin
$
—
$
—
$
51
$
51
Marketing and selling expenses
(1
)
—
—
(1
)
Administrative expenses
(10
)
—
—
(10
)
Other expenses / (income)
—
(32
)
—
(32
)
Restructuring charges
(5
)
—
—
(5
)
Earnings before interest and taxes
$
16
$
32
$
51
$
99
Interest, net
—
—
—
—
Earnings before taxes
$
16
$
32
$
51
$
99
Taxes
4
8
13
25
Earnings from continuing operations
$
12
$
24
$
38
$
74
Earnings from discontinued operations
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
12
$
24
$
38
$
74
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company
$
.04
$
.08
$
.13
$
.25
Diluted earnings per share - discontinued
operations
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company
$
.04
$
.08
$
.13
$
.25
Three Months Ended
August 1, 2021
(millions, except per share amounts)
Restructuring charges,
implementation costs and other related costs (1)
Pension and postretirement
adjustments (2)
Commodity mark-to- market
(3)
Divestiture (6)
Adjustments
Gross margin
$
2
$
—
$
(11
)
$
—
$
(9
)
Marketing and selling expenses
(1
)
—
—
—
(1
)
Administrative expenses
(7
)
—
—
—
(7
)
Other expenses / (income)
—
165
—
(11
)
154
Earnings before interest and taxes
$
10
$
(165
)
$
(11
)
$
11
$
(155
)
Interest, net
—
—
—
—
—
Earnings before taxes
$
10
$
(165
)
$
(11
)
$
11
$
(155
)
Taxes
2
(39
)
(3
)
14
(26
)
Earnings from continuing operations
$
8
$
(126
)
$
(8
)
$
(3
)
$
(129
)
Earnings from discontinued operations
—
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
8
$
(126
)
$
(8
)
$
(3
)
$
(129
)
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company
$
.03
$
(.41
)
$
(.03
)
$
(.01
)
$
(.42
)
Diluted earnings per share - discontinued
operations
—
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company
$
.03
$
(.41
)
$
(.03
)
$
(.01
)
$
(.42
)
Twelve Months Ended
July 31, 2022
August 1, 2021
(millions, except per share amounts)
As reported
Adjustments(a)
Adjusted
As reported
Adjustments(a)
Adjusted
Adjusted Percent
Change
Gross margin
$
2,627
$
64
$
2,691
$
2,811
$
(47
)
$
2,764
(3)%
Gross margin percentage
30.7
%
31.4
%
33.2
%
32.6
%
(120) pts
Marketing and selling expenses
$
734
$
(1
)
$
733
$
817
$
(1
)
$
816
(10)%
Administrative expenses
$
617
$
(20
)
$
597
$
598
$
(28
)
$
570
5%
Other expenses / (income)
$
21
$
(44
)
$
(23
)
$
(254
)
$
192
$
(62
)
Restructuring charges
$
5
$
(5
)
$
—
$
21
$
(21
)
$
—
Earnings before interest and taxes
$
1,163
$
134
$
1,297
$
1,545
$
(189
)
$
1,356
(4)%
Interest, net
188
(4
)
184
209
—
209
(12)%
Earnings before taxes
$
975
$
138
$
1,113
$
1,336
$
(189
)
$
1,147
Taxes
218
34
252
328
(52
)
276
Effective income tax rate
22.4
%
22.6
%
24.6
%
24.1
%
(150) pts
Earnings from continuing operations
$
757
$
104
$
861
$
1,008
$
(137
)
$
871
(1)%
Loss from discontinued operations
—
—
—
(6
)
—
(6
)
n/m
Net earnings attributable to Campbell Soup
Company
$
757
$
104
$
861
$
1,002
$
(137
)
$
865
—%
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company*
$
2.51
$
.34
$
2.85
$
3.30
$
(.45
)
$
2.86
—%
Diluted loss per share - discontinued
operations
—
—
—
(.02
)
—
(.02
)
n/m
Diluted net earnings per share
attributable to Campbell Soup Company*
$
2.51
$
.34
$
2.85
$
3.29
$
(.45
)
$
2.84
—%
(a)See following tables for additional
information.
*The sum of individual per share amounts may not add due to
rounding. n/m - not meaningful
Twelve Months Ended
July 31, 2022
(millions, except per share amounts)
Restructuring
charges, implementation costs and other related
costs (1)
Pension and postretirement
adjustments (2)
Commodity mark-to- market
(3)
Loss on debt
extinguishment (4)
Adjustments
Gross margin
$
5
$
—
$
59
$
—
$
64
Marketing and selling expenses
(1
)
—
—
—
(1
)
Administrative expenses
(20
)
—
—
—
(20
)
Other expenses / (income)
—
(44
)
—
—
(44
)
Restructuring charges
(5
)
—
—
—
(5
)
Earnings before interest and taxes
$
31
$
44
$
59
$
—
$
134
Interest, net
—
—
—
(4
)
(4
)
Earnings before taxes
$
31
$
44
$
59
$
4
$
138
Taxes
7
11
15
1
34
Earnings from continuing operations
$
24
$
33
$
44
$
3
$
104
Earnings from discontinued operations
—
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
24
$
33
$
44
$
3
$
104
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company*
$
.08
$
.11
$
.15
$
.01
$
.34
Diluted earnings per share - discontinued
operations
—
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company*
$
.08
$
.11
$
.15
$
.01
$
.34
*The sum of individual per share amounts
may not add due to rounding.
Twelve Months Ended
August 1, 2021
(millions, except per share amounts)
Restructuring charges,
implementation costs and other related costs (1)
Pension and postretirement
adjustments (2)
Commodity mark-to- market
(3)
Deferred tax charge
(5)
Divestiture (6)
Adjustments
Gross margin
$
3
$
—
$
(50
)
$
—
$
—
$
(47
)
Marketing and selling expenses
(1
)
—
—
—
—
(1
)
Administrative expenses
(28
)
—
—
—
—
(28
)
Other expenses / (income)
—
203
—
—
(11
)
192
Restructuring charges
(21
)
—
—
—
—
(21
)
Earnings before interest and taxes
$
53
$
(203
)
$
(50
)
$
—
$
11
$
(189
)
Interest, net
—
—
—
—
—
—
Earnings before taxes
$
53
$
(203
)
$
(50
)
$
—
$
11
$
(189
)
Taxes
13
(48
)
(12
)
(19
)
14
(52
)
Earnings from continuing operations
$
40
$
(155
)
$
(38
)
$
19
$
(3
)
$
(137
)
Loss from discontinued operations
—
—
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
40
$
(155
)
$
(38
)
$
19
$
(3
)
$
(137
)
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company
$
.13
$
(.51
)
$
(.12
)
$
.06
$
(.01
)
$
(.45
)
Diluted loss per share - discontinued
operations
—
—
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company
$
.13
$
(.51
)
$
(.12
)
$
.06
$
(.01
)
$
(.45
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220831005794/en/
INVESTOR: Rebecca Gardy (856)
342-6081 rebecca_gardy@campbells.com
MEDIA: James Regan (856) 219-6409
James_Regan@campbells.com
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