Revenue
Profits
The consensus target is for EPS of $0.74 in Q2 2023, which compares to adjusted EPS of $0.69 in Q2 2022. In Q1 2023, adjusted EPS grew 15% YoY to $1.02.
Points to note
In the first quarter of 2023, Campbell’s results benefited from price hikes implemented to tackle inflationary pressures. However, these benefits were partly offset by volume declines. Sales increased double-digits across both the Snacks and Meals & Beverages segments helped by consumer demand and brand strength.
In the inflationary environment, consumers are cutting back on outdoor dining and preparing more meals at home. They are also trying to reduce their grocery budgets by moving towards less expensive categories. Campbell’s product portfolio provides consumers with several affordable options for preparing quick meals at home. These trends are likely to have benefited the company during the second quarter.
Higher cost inflation and unfavorable volume and mix hurt margins in Q1, with gross profit margin falling by 30 basis points YoY. The company is working on mitigating these impacts through price increases, supply chain productivity improvements and cost savings initiatives.
In January, Campbell said it was consolidating its Snacks offices in North Carolina and Connecticut into its headquarters in Camden, New Jersey. This move is expected to generate cost savings and help increase margins in the Snacks division. Campbell has also appointed a new Chief Financial Officer, Carrie Anderson. Updates on these new initiatives as well as any new strategies are areas to keep an eye on.
Click here to read the full transcript of Campbell Soup Company’s Q1 2023 earnings conference call