Campbell Soup(US:CPB)2025-03-05 12:23Financial Performance - Net sales for the three months ended January 26, 2025, were $2,685 million, an increase of 9.3% compared to $2,456 million for the same period in 2024[9] - Net earnings attributable to The Campbell's Company for the three months ended January 26, 2025, were $173 million, a decrease of 14.8% from $203 million in the prior year[9] - The company reported a total comprehensive income of $170 million for the three months ended January 26, 2025, down from $186 million in the same period last year[11] - Net earnings for the six months ended January 26, 2025, were $391 million, a decrease from $437 million for the same period in 2024, representing a decline of approximately 10.5%[18] - Total net sales for the company reached $5.457 billion for the six months ended January 26, 2025, compared to $4.974 billion for the same period in 2024[56] - Net sales for Meals & Beverages increased by 22% to $3,385 million, primarily due to a 22-point benefit from the acquisition of Sovos Brands[151] - Total pre-tax costs for cost savings initiatives are estimated at $190 million, with expected annual savings of approximately $250 million by the end of 2028[172][174] Assets and Liabilities - Total assets increased to $15,910 million as of January 26, 2025, compared to $15,235 million as of July 28, 2024, reflecting a growth of 4.4%[14] - The company's long-term debt increased to $6,496 million as of January 26, 2025, compared to $5,761 million as of July 28, 2024, representing a rise of 12.7%[14] - Cash and cash equivalents rose significantly to $829 million as of January 26, 2025, compared to $108 million as of July 28, 2024[14] - Total liabilities at fair value decreased slightly to $116 million as of January 26, 2025, compared to $117 million on July 28, 2024, indicating a 0.85% decrease[95] Expenses - Research and development expenses remained stable at $25 million for both the three months ended January 26, 2025, and January 28, 2024[9] - Marketing and selling expenses increased to $256 million for the three months ended January 26, 2025, up from $217 million in the prior year, marking a rise of 18%[9] - Interest expense increased significantly to $88 million in 2025 from $46 million in 2024, primarily due to higher levels of debt[149] - The effective tax rate rose to 30.0% in 2025 from 25.1% in 2024, influenced by a $15 million deferred tax expense related to the sale of the noosa yoghurt business[150] Acquisitions and Divestitures - The company completed the acquisition of Sovos Brands, Inc. for a total consideration of $2.899 billion, with cash paid to shareholders amounting to $2.339 billion[31] - The acquisition contributed $313 million to net sales and a loss of $9 million to net earnings for the three-month period ended January 26, 2025[34] - The company sold its Pop Secret popcorn business for $70 million, recognizing a pre-tax loss of $25 million[36] - The noosa yoghurt business was sold for $188 million, with net sales of $39 million for the three-month period ended January 26, 2025[38] Shareholder Returns - Total dividends paid during the period amounted to $227 million, slightly up from $224 million in the previous year[18] - The company repurchased 1.134 million shares at a cost of $56 million during the six-month period ended January 26, 2025, compared to 707 thousand shares for $29 million in the same period of 2024[104] - Approximately $205 million remains available under the September 2024 share repurchase program as of January 26, 2025[104] Impairments and Charges - The company incurred restructuring charges of $5 million for the three months ended January 26, 2025, compared to $2 million in the same period last year[9] - The company reported impairment charges of $26 million and restructuring charges of $11 million for the current period, compared to no impairment charges and $4 million in restructuring charges in the prior year[18] - An impairment charge of $15 million was recognized on the Allied brands trademarks due to below-expectation sales performance, with a carrying value of $28 million as of January 26, 2025[47] Cash Flow - Net cash provided by operating activities increased to $737 million, compared to $684 million in the prior year, reflecting a growth of about 7.8%[18] - The net cash used in investing activities was $175 million, an improvement from $256 million in the same period last year[18] - Cash flows from operations increased to $737 million in 2025, up from $684 million in 2024, primarily due to higher cash earnings and changes in working capital[179] Future Outlook - The company anticipates continued supply chain productivity and benefits from cost savings initiatives to mitigate inflationary pressures in 2025[128] - The company expects approximately $135 million of the identified pre-tax costs to be cash expenditures, alongside an investment of approximately $215 million in capital expenditures[68] - The company plans to implement cost savings initiatives beginning in 2025, focusing on supply chain optimization and information technology infrastructure[64]