Campbell Soup(CPB) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales increased 4% to $2.5 billion, with organic net sales up 1% driven by a 2% favorable volume/mix[4] - Adjusted EBIT rose 2% to $362 million, benefiting from the Sovos Brands acquisition[4] - Adjusted EPS decreased 3% to $0.73, reflecting higher adjusted net interest expense[14] - Fiscal 2024 net sales reached $9.6 billion, with a 4% increase in net sales for the three months ended April 27, 2025, compared to $2.369 billion in the same period last year[35][43] - Net earnings attributable to The Campbell's Company for the three months ended April 27, 2025, were $66 million, a 50% decrease from $133 million in the same period last year[40][43] - Earnings before interest and taxes (EBIT) dropped by 35% to $161 million for the three months ended April 27, 2025, compared to $248 million in the prior year[40][43] - Net earnings for the nine months ended April 27, 2025, were $457 million, reflecting a 20% decline from $570 million in the same period last year[42][44] - Total net sales for the nine months ended April 27, 2025, were $7,176 million, a decrease of 9.5% compared to $7,932 million for the same period in 2024[52] - The company reported a net cash used in investing activities of $(80) million for the nine months ended April 27, 2025, compared to $(2,987) million in the prior year[48] Cost Management - The company delivered approximately $110 million in savings under its $250 million cost savings program announced in September 2024[16] - The company plans to continue focusing on cost savings and optimization initiatives to improve operational efficiency moving forward[54] - The company recognized total aggregate impacts related to cost savings and optimization initiatives of $91 million for the nine months ended April 27, 2025, which equates to $0.23 per share[55] Segment Performance - Meals & Beverages segment net sales increased 15%, while Snacks segment net sales decreased 8%[24] - Meals & Beverages segment sales increased by 15% to $1.463 billion, while Snacks segment sales decreased by 8% to $1.012 billion for the three months ended April 27, 2025[43] - For the nine months ended April 27, 2025, total sales increased by 8% to $7.932 billion, with Meals & Beverages up 19% and Snacks down 6%[42][44] - Organic net sales for the nine months ended April 27, 2025, decreased by 1% compared to the previous year, with Meals & Beverages segment showing a 1% increase while Snacks segment decreased by 4%[52] Impairment and Charges - The company recorded impairment charges of $176 million for the nine months ended April 27, 2025, significantly impacting net earnings[48] - In Q4 fiscal 2024, the company recognized an impairment charge of $76 million on the Pop Secret trademark due to lower sales and operating performance[60] - For the year ended July 28, 2024, the total aggregate impact of impairment charges was $129 million, or $0.33 per share after tax[61] - In Q3 fiscal 2025, the company recorded an impairment charge of $150 million on the Snyder's of Hanover trademark, amounting to $0.37 per share after tax[62] Acquisition Costs - The company incurred $93 million in costs associated with the acquisition of Sovos Brands, Inc., with an aggregate after-tax impact of $81 million, or $0.27 per share[64] - For the year ended July 28, 2024, the total costs associated with the acquisition reached $126 million, resulting in an after-tax impact of $109 million, or $0.36 per share[64] - Costs associated with acquisition for the three months ended April 27, 2025, were $0 million, while costs for the same period last year were $93 million[66] Cash Flow and Shareholder Returns - Cash flow from operations for the year-to-date was $872 million, with $403 million returned to shareholders through dividends and share repurchases[4] - Cash flows from operating activities for the nine months ended April 27, 2025, were $872 million, slightly down from $897 million in the prior year[48] - Cash and cash equivalents at the end of the period were $143 million, an increase from $107 million at the end of the same period last year[48] Tax and Earnings Adjustments - The effective income tax rate reported was 18.5%, down 840 basis points from 26.9% in the same quarter last year[66] - The adjusted effective income tax rate for the three months ended April 27, 2025, was 22.7%, a decrease of 10 basis points from 22.8% in the same period last year[67] - Adjusted net earnings attributable to The Campbell's Company decreased by 3% to $218 million for the three months ended April 27, 2025, compared to $224 million in the same period last year[67]