Campbell Soup Co. (CPB) reported a profit for the first quarter that climbed 86 percent from last year, reflecting higher sales volumes, improved gross margin performance and lower selling expenses. Quarterly net sales increased 7 percent due to continued elevated demand for the company’s brands. The company’s board approved a 6 percent increase in its quarterly dividend.
Both earnings and revenue beat analysts’ estimates. But the company expects second-quarter adjusted earnings below their expectations.
Looking ahead for the second-quarter fiscal 2021, the company expects adjusted earnings per share from continuing operations to be $0.81 to $0.83, representing an increase of 12 percent to 15 percent from last year. Analysts expect earnings of $0.84 per share for the second-quarter.
The company projects net sales growth for the second-quarter to be 5 percent to 7 percent compared to last year.
The impact of the continuing pandemic on the company’s fiscal 2021 results is uncertain. Therefore, it did not provide a full-year outlook, Campbell said in a statement.
Campbell Soup reported that its net earnings attributable to the company for the first-quarter climbed 86 percent to $309 million from last year’s $166 million, with earnings per share improving to $1.02 from $0.55 in the previous year.
Adjusted earnings per share for the first-quarter were $1.02 up 31 percent from $0.78 in the prior year, reflecting an increase in adjusted EBIT and lower net interest expense. Analysts polled by Thomson Reuters expected the company to report earnings of $0.91 per share for the first-quarter. Analysts’ estimates typically exclude special items.
Reported EBIT increased 45 percent to $461 million. Excluding items impacting comparability, adjusted EBIT increased 18 percent to $463 million primarily due to higher sales volumes, improved gross margin performance and lower selling expenses, offset partly by increased marketing investment and higher adjusted administrative expenses.
Net sales increased about 7 percent to $2.34 billion from the prior year’s $2.18 billion driven by gains in both Meals & Beverages and Snacks. Analysts expected revenues of $2.32 billion for the first-quarter.
Organic net sales for the first-quarter grew 8 percent driven by a 6 percent increase in volume and mix and a 2 percent increase from lower levels of promotional spending. The volume increase reflected heightened demand as at-home food consumption remained elevated as a result of the COVID-19 pandemic as well as improved retailer soup inventories. Organic net sales exclude the impact from the sale of the European chips business in fiscal 2020.
Meals & Beverages segment’s net sales, both reported and organic, for the first quarter increased 12 percent reflecting increases across U.S retail products, including gains in U.S. soup, partially offset by declines in foodservice.
In Snacks segment, net sales for the first quarter increased 1 percent. Excluding the impact from the sale of the European chips business, organic sales increased 4 percent fueled by power brands.
The company’s board has approved an increase in its quarterly dividend from $0.35 per share to $0.37 per share, an increase of 6 percent, or $1.48 on an annualized basis. The quarterly dividend is payable February 1, 2021, to shareholders of record at the close of business January 9, 2021.
Campbell said that it achieved $15 million in savings in the first quarter of fiscal 2021 under its multi-year cost savings program, bringing total program-to-date savings to $740 million. It remains on track to deliver annualized savings of $850 million by the end of fiscal 2022.
In Wednesday pre-market trade, CPB was trading at $47.80, down $0.46 or 0.95 percent.
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