The Campbell’s Company (CPB) Q3 2024 earnings summary

Executive summary

• Achieved 6% year-over-year net sales growth to $2.4B, driven by Sovos Brands acquisition, with double-digit increases in adjusted EBIT and EPS, and margin expansion.

• Sovos Brands integration is progressing well, contributing incremental growth and validating acquisition assumptions, with synergy realization ahead of plan.

• Meals & Beverages segment showed stable or improving performance, while Snacks faced moderate pressure but maintained resilience and recent improvement.

• Updated FY24 guidance reflects Sovos Brands acquisition, with higher net sales and adjusted EBIT expectations.

• EPS as reported declined due to non-recurring acquisition and restructuring costs, despite adjusted EPS growth.

Financial highlights

• Q3 net sales were $2.4B, up 6% year-over-year; organic net sales were flat.

• Adjusted EBIT increased 13% to $354M; adjusted EPS rose 10% to $0.75.

• Adjusted gross profit margin expanded 30 bps to 31.2%; as reported gross margin was 30.9%.

• Operating cash flow year-to-date was $897M; capital expenditures $376M.

• Net interest expense increased due to higher debt from the acquisition.

Outlook and guidance

• FY24 net sales growth expected at 3–4%, mainly from Sovos Brands; organic net sales flat to down 1%.

• Adjusted EBIT growth forecasted at 6.5–7%; adjusted EPS expected at $3.07–$3.10, up 2–3%.

• Sovos Brands acquisition expected to dilute FY24 EPS by $0.01–$0.02.

• Double-digit adjusted EBIT and EPS growth anticipated in Q4.

• Capital expenditures for FY24 projected at ~$500M.