Campbell Soup(CPB) - 2025 Q2 - Quarterly Results

Financial Performance - Net sales increased 9% to $2.7 billion, while organic net sales decreased 2% to $2.4 billion[4] - Earnings Before Interest and Taxes (EBIT) were $327 million, with adjusted EBIT increasing 2% to $372 million[4] - Diluted Earnings Per Share (EPS) decreased 15% to $0.58, while adjusted EPS decreased 8% to $0.74[4] - Net earnings attributable to The Campbell's Company for the three months ended January 26, 2025, were $173 million, a decrease of 15% from $203 million in the same period last year[42] - Net earnings for the six months ended January 26, 2025, were $391 million, down from $437 million for the same period in 2024, representing a decrease of approximately 10.5%[47] - Adjusted net earnings attributable to The Campbell's Company for Q2 2025 were $222 million, an 8% decrease from $240 million in Q2 2024[62] Sales and Revenue - The company updated its full-year fiscal 2025 guidance, projecting net sales growth of approximately 6% to 8%[18] - For the six months ended January 26, 2025, net sales reached $5.457 billion, a 10% increase compared to $4.974 billion for the same period in the previous year[41] - The Meals & Beverages segment contributed $1.679 billion in sales for the three months ended January 26, 2025, up 21% from $1.382 billion year-over-year[42] - The Snacks segment experienced a 6% decline in sales, totaling $1.006 billion for the three months ended January 26, 2025, compared to $1.074 billion in the prior year[42] - Total net sales for the six months ended January 26, 2025, were $5,457 million, a decrease of 10% from $6,036 million in the same period in 2024[51] - The company expects total net sales for the fiscal year 2025 to be approximately $9,457 million, reflecting a decrease of 1.9% from the previous year[51] Expenses and Cost Management - Marketing and selling expenses increased 18% to $256 million, representing approximately 10% of net sales[9] - The cost savings program delivered approximately $65 million of savings, with expected full-year savings increased to $120 million[16] - Administrative expenses decreased by 13% to $165 million in Q2 fiscal 2025, down from $189 million in Q2 fiscal 2024[60] - Costs associated with cost savings and optimization initiatives amounted to $19 million in Q2 2025, down from $27 million in Q2 2024[62] Cash Flow and Assets - Cash flow from operations for the six months ended January 26, 2025, was $737 million, with $283 million returned to shareholders through dividends and share repurchases[4] - The company reported total assets of $15.910 billion as of January 26, 2025, compared to $12.106 billion a year earlier, reflecting a significant increase[45] - The company has a total cash and cash equivalents balance of $829 million as of January 26, 2025, compared to $169 million in the prior year[45] - The company reported net cash provided by operating activities of $737 million for the six months ended January 26, 2025, compared to $684 million for the same period in 2024, an increase of about 7.8%[47] - The company reported a net cash used in investing activities of $175 million for the six months ended January 26, 2025, compared to $256 million for the same period in 2024, a decrease of approximately 31.6%[47] Debt and Liabilities - Long-term debt increased to $6.496 billion as of January 26, 2025, up from $4.506 billion a year ago[45] - Long-term borrowings increased to $1,144 million in the six months ended January 26, 2025, compared to no long-term borrowings in the same period in 2024[47] Taxation - The effective tax rate was 30.0%, compared to 25.1% in the prior year[13] - The effective income tax rate increased to 30.0% in Q2 2025, up 490 basis points from 25.1% in Q2 2024[61] - In Q2 fiscal 2025, the company recorded a deferred tax expense of $15 million ($0.05 per share) related to the sale of the Noosa yoghurt business[59] Impairments and Charges - The company recognized impairment charges totaling $26 million in the second quarter of fiscal 2025, impacting earnings by $19 million after tax, or $0.06 per share[56] - The total aggregate impact related to cost savings and optimization initiatives was $60 million for the six months ended January 26, 2025, with an after-tax impact of $46 million, or $0.15 per share[54] - The total aggregate impact of charges associated with divestitures in the six-month period of fiscal 2025 was $25 million, or $0.11 per share[59] - Impairment charges for the first half of 2025 totaled $19 million, compared to no charges in the same period of 2024[62] Other Financial Metrics - Gross profit for Q2 fiscal 2025 was reported at $819 million, an increase of 6% compared to $776 million in Q2 fiscal 2024[60] - Adjusted gross profit margin decreased to 30.4% in Q2 fiscal 2025 from 31.4% in Q2 fiscal 2024, reflecting a decline of 100 basis points[60] - Adjusted earnings before interest and taxes for the first half of 2025 rose to $804 million, up 4% from $771 million in the same period of 2024[61] - The company recognized an actuarial loss of $2 million related to a postretirement plan in the six-month period of fiscal 2025[59] - In the six-month period of fiscal 2025, litigation expenses related to the Plum business totaled $2 million, impacting earnings by $0.01 per share[59] - The company recorded insurance recoveries of $1 million related to a cybersecurity incident in the six-month period of fiscal 2025[59]