- Earnings Per Share (EPS) from Continuing Operations were $0.70.
Adjusted EPS decreased $0.13, or 16%, to $0.69 due to industry-wide
inflation and supply constraints.
- Net Sales decreased 3%; Organic Net Sales decreased 2%.
Compared to the second quarter of fiscal 2020, net sales increased
2% and organic net sales increased 3%. Demand remained strong with
consumption up 1% compared to prior year and up 9% on a two-year
basis.
- Year-over-year second half financial performance expected to
improve as recent pricing actions will be fully reflected in market
while supply and labor conditions improve.
- Full-year guidance reaffirmed.
Campbell Soup Company (NYSE:CPB) today reported results
for its second-quarter fiscal 2022.
Continuing Operations
Three Months Ended
Six Months Ended
($ in millions, except per share)
Jan. 30, 2022
Jan. 31, 2021
% Change
Jan. 30, 2022
Jan. 31, 2021
% Change
Net Sales
As Reported (GAAP)
$2,209
$2,279
(3)%
$4,445
$4,619
(4)%
Organic
(2)%
(3)%
Earnings Before Interest and Taxes
(EBIT)
As Reported (GAAP)
$323
$401
(19)%
$699
$862
(19)%
Adjusted
$318
$382
(17)%
$707
$839
(16)%
Diluted Earnings Per Share
As Reported (GAAP)
$0.70
$0.80
(13)%
$1.56
$1.82
(14)%
Adjusted
$0.69
$0.82
(16)%
$1.58
$1.82
(13)%
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 Commenting on the quarter, Mark Clouse,
Campbell’s President and CEO, said, "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. However, heading into the second half of the fiscal
year, we are seeing labor availability and service levels improve,
better mitigation of inflation with pricing, and strong levels of
demand all underpinning our confidence in our delivery of full-year
guidance.”
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
Six Months Ended
Jan. 30, 2022
Jan. 31, 2021
Jan. 30, 2022
Jan. 31, 2021
As Reported (GAAP)
$0.70
$0.80
$1.56
$1.82
Restructuring charges, implementation
costs and other related costs associated with cost savings
initiatives
$0.01
$0.05
$0.02
$0.07
Pension and postretirement adjustments
$(0.03)
$(0.08)
$(0.01)
$(0.09)
Commodity mark-to-market adjustments
$—
$(0.03)
$0.01
$(0.04)
Deferred tax charge
$—
$0.06
$—
$0.06
Adjusted*
$0.69
$0.82
$1.58
$1.82
*Numbers may not add due to rounding.
Second-Quarter Results from Continuing Operations Net
sales in the quarter decreased 3% versus the prior year to $2.21
billion. Organic net sales, which exclude the impact from the sale
of the Plum baby food and snacks business, decreased 2%. Pricing
and sales allowances and lower promotional spending had a favorable
5% and 1% impact on net sales, respectively. This was more than
offset by an 8% decrease in volume and mix as the company continued
to navigate industry-wide labor and supply challenges.
As anticipated, gross margin decreased to 30.3% from 34.4% last
year. Excluding items impacting comparability, adjusted gross
margin decreased 340 basis points to 30.4% as higher cost inflation
and other supply chain costs, and unfavorable volume/mix largely
due to reduced operating leverage were partially offset by the
benefit of pricing actions, supply chain productivity improvements,
lower levels of promotional spending and cost savings
initiatives.
Marketing and selling expenses decreased 15% to $197 million
driven by lower advertising and consumer promotion expense
(A&C). Total A&C was reduced by 27% as investment was
moderated to reflect supply pressure and is expected to normalize
as supply strengthens throughout the year.
Administrative expenses decreased 7% to $147 million. Excluding
items impacting comparability, adjusted administrative expenses
decreased by $8 million, or 5%, to $144 million due to benefits
from cost savings initiatives and lower benefit-related costs.
Other income was $19 million compared to $45 million in the
prior year. Excluding items impacting comparability, adjusted other
income was $9 million compared to $15 million in the prior
year.
As reported EBIT decreased to $323 million from $401 million in
the prior year. Excluding items impacting comparability, adjusted
EBIT decreased 17% compared to the prior year to $318 million
primarily due to sales volume declines and lower adjusted gross
margin performance, partially offset by lower marketing and selling
expenses.
Net interest expense was $46 million compared to $54 million in
the prior year reflecting lower levels of debt in the current year.
The tax rate was 23.5% compared to 29.4% in the prior year.
Excluding items impacting comparability, the adjusted tax rate
decreased 60 basis points to 23.5% from 24.1%.
As reported EPS from continuing operations were $0.70 per share
compared to $0.80 per share in the prior year. Excluding items
impacting comparability, adjusted EPS from continuing operations
decreased $0.13, or 16%, compared to the prior year to $0.69
primarily reflecting the decrease in adjusted EBIT, partially
offset by lower interest expense, a lower adjusted tax rate and the
benefit of lower weighted average diluted shares outstanding.
First-Half Results from Continuing Operations Net sales
decreased 4% to $4.45 billion. Organic net sales, which exclude the
impact from the sale of the Plum baby food and snacks business,
decreased 3% driven by volume declines primarily due to supply
constraints, partly offset by favorable price and sales
allowances.
As reported EBIT decreased 19% compared to the prior year to
$699 million. Excluding items impacting comparability, adjusted
EBIT decreased 16% compared to the prior year to $707 million,
reflecting sales volume declines, lower adjusted gross margin
performance and lower adjusted other income, partially offset by
lower marketing and selling expenses.
Net interest expense was $93 million compared to $109 million in
the prior year reflecting lower levels of debt. The tax rate was
21.9% compared to 26.4% in the prior year. Excluding items
impacting comparability, the adjusted tax rate was 22.0% compared
to 24.0% in the prior year, primarily due to the favorable
resolution of several tax matters in the first quarter of this
fiscal year.
The company reported EPS from continuing operations of $1.56 per
share compared to $1.82 per share in the prior year. Excluding
items impacting comparability, adjusted EPS from continuing
operations decreased 13% compared to the prior year to $1.58 per
share.
Cash flows from operations increased from $611 million in the
prior year to $766 million primarily due to changes in working
capital, primarily accounts payable and accounts receivable,
partially offset by lower cash earnings. Capital investments were
$129 million compared to $132 million in the prior year. In line
with the company’s commitment to return value to shareholders, the
company paid $228 million of cash dividends. During the first half,
the company repurchased approximately 1.5 million shares of its
common stock at an aggregate cost of $65 million. At the end of the
second quarter, the company had approximately $475 million
remaining under the current $500 million strategic share repurchase
program. The company also has a $250 million anti-dilutive share
repurchase program of which approximately $174 million was
remaining.
Cost Savings Program from Continuing Operations In the
second quarter, Campbell achieved $15 million of savings under its
multi-year cost savings program, inclusive of Snyder’s-Lance
synergies, bringing total program-to-date savings to approximately
$835 million. Campbell remains on track to deliver savings of $1
billion by the end of fiscal 2025.
Full-Year Fiscal 2022 Guidance Campbell continues to
expect full-year fiscal 2022 net sales, adjusted EBIT and adjusted
EPS performance to be consistent with its guidance provided on
December 8, 2021.
The company's full-year guidance reflects expected continued
strong demand for the balance of the year with steady supply
recovery and improved service levels particularly in the fourth
quarter as labor recovers. However, core inflation is now expected
to be low double-digits for the full year. Wave two pricing will be
fully reflected in the third quarter and the company expects to
continue managing inflationary headwinds through pricing, supply
chain productivity improvements and cost savings initiatives. The
company expects these actions, an improved labor outlook, and
easier prior-year comparisons to result in margin progress and
earnings recovery in the second half.
The full-year fiscal 2022 guidance is set forth in the table
below:
Continuing Operations
FY2021 Results
FY2022 Guidance
($ in millions, except per share)
Net Sales
$8,476
(2)% to 0%
Organic Net Sales
(1)% to +1%
Adjusted EBIT
$1,356
*
(4.5)% to (1.5)%
Adjusted EPS
$2.86
*
(4)% to 0%
$2.75 to $2.85
* Adjusted - refer to the detailed reconciliation of the
reported (GAAP) financial information to the adjusted financial
information at the end of this news release. Note: A non-GAAP
reconciliation is not provided for fiscal 2022 guidance as the
company is unable to reasonably estimate the full-year financial
impact of items such as actuarial gains or losses on pension and
postretirement plans because these impacts are dependent on future
changes in market conditions. The inability to predict the amount
and timing of these future items makes a detailed reconciliation of
these forward-looking financial measures impracticable.
The sale of the Plum baby food and snacks business, which was
divested on May 3, 2021, is estimated to have an impact of 1
percentage point on net sales in fiscal 2022.
Segment Operating Review
An analysis of net sales and operating earnings by reportable
segment follows:
Three
Months Ended Jan. 30, 2022
($ in millions)
Meals & Beverages*
Snacks
Total
Net Sales, as Reported
$1,275
$934
$2,209
Volume and Mix
(6)%
(12)%
(8)%
Price and Sales Allowances
5%
5%
5%
Promotional Spending
(1)%
4%
1%
Organic Net Sales
(2)%
(3)%
(2)%
Divestiture
(2)%
—%
(1)%
% Change vs. Prior Year
(3)%
(3)%
(3)%
Segment Operating Earnings
$213
$121
% Change vs. Prior Year
(19)%
(14)%
*Numbers do not add due to rounding.
Note: A detailed reconciliation of the
reported (GAAP) net sales to organic net sales is included at the
end of this news release.
Six
Months Ended Jan. 30, 2022
($ in millions)
Meals & Beverages*
Snacks
Total*
Net Sales, as Reported
$2,541
$1,904
$4,445
Volume and Mix
(7)%
(8)%
(7)%
Price and Sales Allowances
5%
5%
5%
Promotional Spending
(2)%
1%
—%
Organic Net Sales
(4)%
(2)%
(3)%
Divestiture
(2)%
—%
(1)%
% Change vs. Prior Year
(5)%
(2)%
(4)%
Segment Operating Earnings
$493
$249
% Change vs. Prior Year
(18)%
(9)%
*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 decreased
3%. Organic net sales, which exclude the impact from the sale of
the Plum baby food and snacks business, declined 2% 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.
Volume declined due to supply constraints driven by labor and
materials availability. Price and sales allowances were favorable
in the quarter, partially offset by increased promotional spending
relative to moderated levels in the prior-year quarter. Sales of
U.S. soup decreased 1%, cycling a 10% increase in the prior-year
quarter, due to declines in condensed soups, partly offset by gains
in ready-to-serve soups and broth.
Segment operating earnings in the quarter decreased 19%. The
decrease was primarily due to sales volume declines and lower gross
margin performance, partially offset by lower marketing and selling
expenses. Gross margin performance was impacted by higher cost
inflation and other supply chain costs, unfavorable volume/mix,
which was largely due to reduced operating leverage, as well as
higher levels of promotional spending, partially offset by the
benefit of pricing actions and supply chain productivity
improvements.
Snacks Net sales in the quarter, both reported and
organic, decreased 3% while sales of power brands were up 1%.
Segment sales decreased due to declines in non-core businesses and
in certain salty snacks, primarily Late July snacks, partially
offset by gains in Goldfish crackers. Overall favorable price and
sales allowances and lower promotional spending were more than
offset by volume declines driven by significant supply constraints
due to labor.
Segment operating earnings in the quarter decreased 14% driven
by sales volume declines and increased administrative expenses,
partially offset by lower marketing and selling expenses. Increased
pricing and lower promotional spending combined with the results of
supply chain productivity improvements and cost savings initiatives
largely offset cost inflation, higher other supply chain costs and
unfavorable volume/mix, which was largely due to reduced operating
leverage.
Corporate Corporate expense was $11 million in the second
quarter of fiscal 2022 compared to income of $17 million in the
prior year. Corporate expense in the second quarter of fiscal 2022
included pension actuarial gains of $10 million and costs of $5
million related to cost savings initiatives. Corporate income in
the second quarter of fiscal 2021 included pension actuarial gains
of $30 million, unrealized mark-to-market gains on outstanding
undesignated commodity hedges of $11 million, and costs related to
cost savings initiatives of $4 million.
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 833-968-2192. Participants calling from
outside the U.S. may dial in using phone number +1 236-714-2136.
The conference access code is 6869924. 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
March 23, 2022, at +1 416-621-4642 or 800-585-8367. The access code
for the replay is 6869924.
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. The segment also includes the retail business in Latin
America. We refer to the * brands as our "power brands."
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 2021 net sales
of nearly $8.5 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 recent
outbreak of hostilities 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
January 30, 2022
January 31, 2021
Net sales
$
2,209
$
2,279
Costs and expenses
Cost of products sold
1,540
1,496
Marketing and selling expenses
197
232
Administrative expenses
147
158
Research and development expenses
21
19
Other expenses / (income)
(19
)
(45
)
Restructuring charges
—
18
Total costs and expenses
1,886
1,878
Earnings before interest and taxes
323
401
Interest, net
46
54
Earnings before taxes
277
347
Taxes on earnings
65
102
Earnings from continuing operations
212
245
Earnings from discontinued operations
—
—
Net earnings
212
245
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
212
$
245
Per share - basic
Earnings from continuing operations
attributable to Campbell Soup Company
$
.70
$
.81
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
.70
$
.81
Weighted average shares outstanding -
basic
302
303
Per share - assuming dilution
Earnings from continuing operations
attributable to Campbell Soup Company
$
.70
$
.80
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
.70
$
.80
Weighted average shares outstanding -
assuming dilution
303
305
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (millions, except
per share amounts)
Six Months Ended
January 30, 2022
January 31, 2021
Net sales
$
4,445
$
4,619
Costs and expenses
Cost of products sold
3,054
3,023
Marketing and selling expenses
367
440
Administrative expenses
303
299
Research and development expenses
42
39
Other expenses / (income)
(20
)
(63
)
Restructuring charges
—
19
Total costs and expenses
3,746
3,757
Earnings before interest and taxes
699
862
Interest, net
93
109
Earnings before taxes
606
753
Taxes on earnings
133
199
Earnings from continuing operations
473
554
Earnings from discontinued operations
—
—
Net earnings
473
554
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
473
$
554
Per share - basic
Earnings from continuing operations
attributable to Campbell Soup Company
$
1.57
$
1.83
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
1.57
$
1.83
Weighted average shares outstanding -
basic
302
303
Per share - assuming dilution
Earnings from continuing operations
attributable to Campbell Soup Company
$
1.56
$
1.82
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
1.56
$
1.82
Weighted average shares outstanding -
assuming dilution
303
305
CAMPBELL SOUP COMPANY
CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS
(unaudited) (millions, except per share amounts)
Three Months Ended
January 30, 2022
January 31, 2021
Percent Change
Sales
Contributions:
Meals & Beverages
$
1,275
$
1,318
(3
)%
Snacks
934
961
(3
)%
Total sales
$
2,209
$
2,279
(3
)%
Earnings
Contributions:
Meals & Beverages
$
213
$
262
(19
)%
Snacks
121
140
(14
)%
Total operating earnings
334
402
(17
)%
Corporate income (expense)
(11
)
17
Restructuring charges
—
(18
)
Earnings before interest and taxes
323
401
(19
)%
Interest, net
46
54
Taxes on earnings
65
102
Earnings from continuing operations
212
245
(13
)%
Earnings from discontinued operations
—
—
Net earnings
212
245
(13
)%
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
212
$
245
(13
)%
Per share - assuming dilution
Earnings from continuing operations
attributable to Campbell Soup Company
$
.70
$
.80
(13
)%
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
.70
$
.80
(13
)%
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
(unaudited) (millions, except per share amounts)
Six Months Ended
January 30, 2022
January 31, 2021
Percent Change
Sales
Contributions:
Meals & Beverages
$
2,541
$
2,681
(5
)%
Snacks
1,904
1,938
(2
)%
Total sales
$
4,445
$
4,619
(4
)%
Earnings
Contributions:
Meals & Beverages
$
493
$
599
(18
)%
Snacks
249
275
(9
)%
Total operating earnings
742
874
(15
)%
Corporate income (expense)
(43
)
7
Restructuring charges
—
(19
)
Earnings before interest and taxes
699
862
(19
)%
Interest, net
93
109
Taxes on earnings
133
199
Earnings from continuing operations
473
554
(15
)%
Earnings from discontinued operations
—
—
Net earnings
473
554
(15
)%
Net loss attributable to noncontrolling
interests
—
—
Net earnings attributable to Campbell Soup
Company
$
473
$
554
(15
)%
Per share - assuming dilution
Earnings from continuing operations
attributable to Campbell Soup Company
$
1.56
$
1.82
(14
)%
Earnings from discontinued operations
—
—
Net earnings attributable to Campbell Soup
Company
$
1.56
$
1.82
(14
)%
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 CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited) (millions)
January 30, 2022
January 31, 2021
Current assets
$
1,980
$
2,535
Plant assets, net
2,330
2,329
Intangible assets, net
7,197
7,320
Other assets
484
314
Total assets
$
11,991
$
12,498
Current liabilities
$
2,322
$
2,801
Long-term debt
4,565
4,996
Other liabilities
1,752
1,776
Total equity
3,352
2,925
Total liabilities and equity
$
11,991
$
12,498
Total debt
$
5,029
$
6,021
Total cash and cash equivalents
$
357
$
946
CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (millions)
Six Months Ended
January 30, 2022
January 31, 2021
Cash flows from operating activities:
Net earnings
$
473
$
554
Adjustments to reconcile net earnings to
operating cash flow
Restructuring charges
—
19
Stock-based compensation
31
34
Pension and postretirement benefit
income
(35
)
(66
)
Depreciation and amortization
166
154
Deferred income taxes
31
69
Other
40
47
Changes in working capital
Accounts receivable
(17
)
(124
)
Inventories
22
57
Prepaid assets
(5
)
(3
)
Accounts payable and accrued
liabilities
78
(108
)
Other
(18
)
(22
)
Net cash provided by operating
activities
766
611
Cash flows from investing activities:
Purchases of plant assets
(129
)
(132
)
Purchases of route businesses
—
(1
)
Sales of route businesses
2
6
Other
2
7
Net cash used in investing activities
(125
)
(120
)
Cash flows from financing activities:
Short-term borrowings, including
commercial paper
444
—
Short-term repayments, including
commercial paper
(486
)
(176
)
Dividends paid
(228
)
(215
)
Treasury stock purchases
(65
)
—
Treasury stock issuances
1
—
Payments related to tax withholding for
stock-based compensation
(18
)
(14
)
Net cash used in financing activities
(352
)
(405
)
Effect of exchange rate changes on
cash
(1
)
1
Net change in cash and cash
equivalents
288
87
Cash and cash equivalents — beginning of
period
69
859
Cash and cash equivalents — end of
period
$
357
$
946
Reconciliation of GAAP to Non-GAAP Financial
Measures Second Quarter Ended January 30, 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
January 30, 2022
January 31, 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
$
1,275
$
(2
)
$
1,273
$
1,318
$
(23
)
$
1,295
(3
)%
(2
)%
Snacks
934
—
934
961
—
961
(3
)%
(3
)%
Total Net Sales
$
2,209
$
(2
)
$
2,207
$
2,279
$
(23
)
$
2,256
(3
)%
(2
)%
Six Months Ended
January 30, 2022
January 31, 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
$
2,541
$
(8
)
$
2,533
$
2,681
$
(46
)
$
2,635
(5
)%
(4
)%
Snacks
1,904
—
1,904
1,938
—
1,938
(2
)%
(2
)%
Total Net Sales
$
4,445
$
(8
)
$
4,437
$
4,619
$
(46
)
$
4,573
(4
)%
(3
)%
Three Months Ended
January 30, 2022
January 26, 2020
% 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
$
1,275
$
(4
)
$
1,271
$
1,252
$
(26
)
$
1,226
2
%
4
%
Snacks
934
1
935
910
—
910
3
%
3
%
Total Net Sales
$
2,209
$
(3
)
$
2,206
$
2,162
$
(26
)
$
2,136
2
%
3
%
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, 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 second quarter of fiscal 2022, the
company recorded implementation costs and other related costs of $3
million in Administrative expenses and $2 million in Cost of
products sold (aggregate impact of $4 million after tax, or $.01
per share) related to these initiatives. In the second quarter of
fiscal 2021, the company recorded Restructuring charges of $18
million and implementation costs and other related costs of $6
million in Administrative expenses, and a reduction to Cost of
products sold of $2 million (aggregate impact of $16 million after
tax, or $.05 per share) related to these initiatives. In the
six-month period of fiscal 2022, the company recorded
implementation costs and other related costs of $5 million in
Administrative expenses and $4 million in Cost of products sold
(aggregate impact of $7 million after tax, or $.02 per share)
related to these initiatives. In the six-month period of fiscal
2021, the company recorded Restructuring charges of $19 million and
implementation costs and other related costs of $10 million in
Administrative expenses, and a reduction to Cost of products sold
of $1 million (aggregate impact of $21 million after tax, or $.07
per share) related to these initiatives. For the year ended August
1, 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 second quarter of fiscal 2022, the
company recognized actuarial gains in Other expenses / (income) of
$10 million ($8 million after tax, or $.03 per share). In the
second quarter of fiscal 2021, the company recognized actuarial
gains in Other expenses / (income) of $30 million ($23 million
after tax, or $.08 per share). In the six-month period of fiscal
2022, the company recognized actuarial gains in Other expenses /
(income) of $4 million ($3 million after tax, or $.01 per share).
In the six-month period of fiscal 2021, the company recognized
actuarial gains in Other expenses / (income) of $34 million ($26
million after tax, or $.09 per share). The actuarial gains related
to the remeasurements of U.S. and Canadian pension plans. These
interim remeasurements were each due to lump sum distributions that
exceeded or are expected to exceed service and interest costs
resulting in settlement accounting for the plans. For the year
ended August 1, 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 second 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 the six-month period of fiscal 2022, the
company recognized losses in Cost of products sold of $3 million
($2 million after tax, or $.01 per share) associated with
unrealized mark-to-market adjustments on outstanding undesignated
commodity hedges. In the six-month period of fiscal 2021, the
company recognized gains in Cost of products sold of $17 million
($13 million after tax, or $.04 per share) associated with
unrealized mark-to-market adjustments on outstanding undesignated
commodity hedges. For the year ended August 1, 2021, the company
recognized gains in Cost of products sold of $50 million ($38
million, or $.12 per share) associated with unrealized
mark-to-market adjustments on outstanding undesignated commodity
hedges.
(4)
In the second quarter of 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.
(5)
For the year ended August 1, 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
January 30, 2022
January 31, 2021
(millions, except per share amounts)
As reported
Adjustments(a)
Adjusted
As reported
Adjustments(a)
Adjusted
Adjusted Percent
Change
Gross margin
$
669
$
2
$
671
$
783
$
(13
)
$
770
(13)%
Gross margin percentage
30.3
%
30.4
%
34.4
%
33.8
%
(340) pts
Administrative expenses
$
147
$
(3
)
$
144
$
158
$
(6
)
$
152
(5)%
Other expenses / (income)
$
(19
)
$
10
$
(9
)
$
(45
)
$
30
$
(15
)
Restructuring charges
$
—
$
—
$
—
$
18
$
(18
)
$
—
Earnings before interest and taxes
$
323
$
(5
)
$
318
$
401
$
(19
)
$
382
(17)%
Interest, net
46
—
46
54
—
54
(15)%
Earnings before taxes
$
277
$
(5
)
$
272
$
347
$
(19
)
$
328
Taxes
65
(1
)
64
102
(23
)
79
Effective income tax rate
23.5
%
23.5
%
29.4
%
24.1
%
(60) pts
Earnings from continuing operations
$
212
$
(4
)
$
208
$
245
$
4
$
249
(16)%
Earnings from discontinued operations
—
—
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
212
$
(4
)
$
208
$
245
$
4
$
249
(16)%
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company*
$
.70
$
(.01
)
$
.69
$
.80
$
.01
$
.82
(16)%
Diluted earnings per share - discontinued
operations
—
—
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company*
$
.70
$
(.01
)
$
.69
$
.80
$
.01
$
.82
(16)%
(a)See following tables for additional
information.
*The sum of individual per share amounts
may not add due to rounding.
Three Months Ended
January 30, 2022
(millions, except per share amounts)
Restructuring charges,
implementation costs and other related costs (1)
Pension and postretirement
adjustments (2)
Adjustments
Gross margin
$
2
$
—
$
2
Administrative expenses
(3
)
—
(3
)
Other expenses / (income)
—
10
10
Earnings before interest and taxes
$
5
$
(10
)
$
(5
)
Interest, net
—
—
—
Earnings before taxes
$
5
$
(10
)
$
(5
)
Taxes
1
(2
)
(1
)
Earnings from continuing operations
$
4
$
(8
)
$
(4
)
Earnings from discontinued operations
—
—
—
Net earnings attributable to Campbell Soup
Company
$
4
$
(8
)
$
(4
)
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company*
$
.01
$
(.03
)
$
(.01
)
Diluted earnings per share - discontinued
operations
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company*
$
.01
$
(.03
)
$
(.01
)
*The sum of individual per share amounts
may not add due to rounding.
Three Months Ended
January 31, 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
(4)
Adjustments
Gross margin
$
(2
)
$
—
$
(11
)
$
—
$
(13
)
Administrative expenses
(6
)
—
—
—
(6
)
Other expenses / (income)
—
30
—
—
30
Restructuring charges
(18
)
—
—
—
(18
)
Earnings before interest and taxes
$
22
$
(30
)
$
(11
)
$
—
$
(19
)
Interest, net
—
—
—
—
—
Earnings before taxes
$
22
$
(30
)
$
(11
)
$
—
$
(19
)
Taxes
6
(7
)
(3
)
(19
)
(23
)
Earnings from continuing operations
$
16
$
(23
)
$
(8
)
$
19
$
4
Earnings from discontinued operations
—
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
16
$
(23
)
$
(8
)
$
19
$
4
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company*
$
.05
$
(.08
)
$
(.03
)
$
.06
$
.01
Diluted earnings per share - discontinued
operations
—
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company*
$
.05
$
(.08
)
$
(.03
)
$
.06
$
.01
*The sum of individual per share amounts
may not add due to rounding.
Six Months Ended
January 30, 2022
January 31, 2021
(millions, except per share amounts)
As reported
Adjustments(a)
Adjusted
As reported
Adjustments(a)
Adjusted
Adjusted Percent
Change
Gross margin
$
1,391
$
7
$
1,398
$
1,596
$
(18
)
$
1,578
(11)%
Gross margin percentage
31.3
%
31.5
%
34.6
%
34.2
%
(270) pts
Administrative expenses
$
303
$
(5
)
$
298
$
299
$
(10
)
$
289
3%
Other expenses / (income)
$
(20
)
$
4
$
(16
)
$
(63
)
$
34
$
(29
)
Restructuring charges
$
—
$
—
$
—
$
19
$
(19
)
$
—
Earnings before interest and taxes
$
699
$
8
$
707
$
862
$
(23
)
$
839
(16)%
Interest, net
93
—
93
109
—
109
(15)%
Earnings before taxes
$
606
$
8
$
614
$
753
$
(23
)
$
730
Taxes
133
2
135
199
(24
)
175
Effective income tax rate
21.9
%
22.0
%
26.4
%
24.0
%
(200) pts
Earnings from continuing operations
$
473
$
6
$
479
$
554
$
1
$
555
(14)%
Earnings from discontinued operations
—
—
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
473
$
6
$
479
$
554
$
1
$
555
(14)%
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company
$
1.56
$
.02
$
1.58
$
1.82
$
—
$
1.82
(13)%
Diluted earnings per share - discontinued
operations
—
—
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company
$
1.56
$
.02
$
1.58
$
1.82
$
—
$
1.82
(13)%
(a)See following tables for additional
information.
Six Months Ended
January 30, 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
$
4
$
—
$
3
$
7
Administrative expenses
(5
)
—
—
(5
)
Other expenses / (income)
—
4
—
4
Earnings before interest and taxes
$
9
$
(4
)
$
3
$
8
Interest, net
—
—
—
—
Earnings before taxes
$
9
$
(4
)
$
3
$
8
Taxes
2
(1
)
1
2
Earnings from continuing operations
$
7
$
(3
)
$
2
$
6
Earnings from discontinued operations
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
7
$
(3
)
$
2
$
6
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company
$
.02
$
(.01
)
$
.01
$
.02
Diluted earnings per share - discontinued
operations
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company
$
.02
$
(.01
)
$
.01
$
.02
Six Months Ended
January 31, 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
(4)
Adjustments
Gross margin
$
(1
)
$
—
$
(17
)
$
—
$
(18
)
Administrative expenses
(10
)
—
—
—
(10
)
Other expenses / (income)
—
34
—
—
34
Restructuring charges
(19
)
—
—
—
(19
)
Earnings before interest and taxes
$
28
$
(34
)
$
(17
)
$
—
$
(23
)
Interest, net
—
—
—
—
—
Earnings before taxes
$
28
$
(34
)
$
(17
)
$
—
$
(23
)
Taxes
7
(8
)
(4
)
(19
)
(24
)
Earnings from continuing operations
$
21
$
(26
)
$
(13
)
$
19
$
1
Earnings from discontinued operations
—
—
—
—
—
Net earnings attributable to Campbell Soup
Company
$
21
$
(26
)
$
(13
)
$
19
$
1
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company
$
.07
$
(.09
)
$
(.04
)
$
.06
$
—
Diluted earnings per share - discontinued
operations
—
—
—
—
—
Diluted net earnings per share
attributable to Campbell Soup Company
$
.07
$
(.09
)
$
(.04
)
$
.06
$
—
(millions, except per share amounts)
Year Ended August 1,
2021
Gross margin, as reported
$
2,811
Add: Restructuring charges, implementation
costs and other related costs (1)
3
Deduct: Commodity mark-to-market
adjustments (3)
(50
)
Adjusted Gross margin
$
2,764
Adjusted Gross margin
percentage
32.6
%
Earnings before interest and taxes, as
reported
$
1,545
Add: Restructuring charges, implementation
costs and other related costs (1)
53
Deduct: Pension and postretirement
adjustments (2)
(203
)
Deduct: Commodity mark-to-market
adjustments (3)
(50
)
Add: Divestiture (5)
11
Adjusted Earnings before interest and
taxes
$
1,356
Interest, net, as reported
$
209
Adjusted Earnings before taxes
$
1,147
Taxes on earnings, as reported
$
328
Add: Tax benefit from restructuring
charges, implementation costs and other related costs (1)
13
Deduct: Tax expense from pension and
postretirement adjustments (2)
(48
)
Deduct: Tax expense from commodity
mark-to-market adjustments (3)
(12
)
Deduct: Tax expense from deferred tax
charge (4)
(19
)
Add: Tax benefit from divestiture (5)
14
Adjusted Taxes on earnings
$
276
Adjusted effective income tax
rate
24.1
%
Earnings from continuing operations, as
reported
$
1,008
Add: Net adjustment from restructuring
charges, implementation costs and other related costs (1)
40
Deduct: Net adjustment from pension and
postretirement adjustments (2)
(155
)
Deduct: Net adjustment from commodity
mark-to-market adjustments (3)
(38
)
Add: Net adjustment from deferred tax
charge (4)
19
Deduct: Net adjustment from divestiture
(5)
(3
)
Adjusted Earnings from continuing
operations
$
871
Loss from discontinued operations, as
reported
$
(6
)
Adjusted Net earnings attributable to
Campbell Soup Company
$
865
Diluted earnings per share - continuing
operations attributable to Campbell Soup Company, as
reported
$
3.30
Add: Net adjustment from restructuring
charges, implementation costs and other related costs (1)
.13
Deduct: Net adjustment from pension and
postretirement adjustments (2)
(.51
)
Deduct: Net adjustment from commodity
mark-to-market adjustments (3)
(.12
)
Add: Net adjustment from deferred tax
charge (4)
.06
Deduct: Net adjustment from divestiture
(5)
(.01
)
Adjusted Diluted earnings per share -
continuing operations attributable to Campbell Soup
Company*
$
2.86
Diluted loss per share - discontinued
operations, as reported
$
(.02
)
Diluted net earnings per share
attributable to Campbell Soup Company, as reported*
$
3.29
Add: Net adjustment from restructuring
charges, implementation costs and other related costs (1)
.13
Deduct: Net adjustment from pension and
postretirement adjustments (2)
(.51
)
Deduct: Net adjustment from commodity
mark-to-market adjustments (3)
(.12
)
Add: Net adjustment from deferred tax
charge (4)
.06
Deduct: Net adjustment from divestiture
(5)
(.01
)
Adjusted Diluted net earnings per share
attributable to Campbell Soup Company
$
2.84
*The sum of individual per share amounts
may not add due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220308006232/en/
INVESTOR CONTACT: Rebecca Gardy
(856) 342-6081 rebecca_gardy@campbells.com
MEDIA CONTACT: James Regan (856)
219-6409 James_Regan@campbells.com
Campbell Soup (NYSE:CPB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Campbell Soup (NYSE:CPB)
Historical Stock Chart
From Jul 2023 to Jul 2024