Campbell Soup(US:CPB)2025-12-09 12:19Financial Performance - Net sales for the three months ended November 2, 2025, were $2,677 million, a decrease of 3.4% compared to $2,772 million for the same period in 2024[8] - Net earnings attributable to The Campbell's Company for the three months ended November 2, 2025, were $194 million, down 11.0% from $218 million in the prior year[8] - For the three months ended November 2, 2025, net sales totaled $2.677 billion, a decrease from $2.772 billion for the same period in 2024[42] - Earnings per share were $0.65 in 2026, down from $0.72 in the prior year, with the current quarter including expenses of $0.12 per share related to various initiatives[105] - Operating earnings decreased by 12% to $420 million, with Meals & Beverages segment earnings down 13% and Snacks segment earnings down 10%[117] Assets and Liabilities - Total current assets increased to $2,563 million as of November 2, 2025, compared to $2,232 million as of August 3, 2025, reflecting a growth of 14.8%[14] - Total assets rose to $15,179 million as of November 2, 2025, up from $14,896 million as of August 3, 2025, indicating an increase of 1.9%[14] - The company reported total liabilities of $11,220 million as of November 2, 2025, compared to $10,992 million as of August 3, 2025, representing a rise of 2.1%[14] - As of November 2, 2025, the company had negative working capital of $567 million, with total debt maturing within one year amounting to $874 million[133] Cash Flow and Dividends - Cash and cash equivalents at the end of the period were $168 million, an increase from $132 million at the beginning of the period[16] - The net cash provided by operating activities was $224 million for the three months ended November 2, 2025, slightly down from $225 million in the prior year[16] - The company paid dividends of $120 million during the three months ended November 2, 2025, compared to $116 million in the same period last year[16] - The company declared dividends of $0.39 per share, totaling $118 million for the period ending August 3, 2025[18] Restructuring and Cost Savings - The company incurred restructuring charges of $3 million for the three months ended November 2, 2025, down from $6 million in the same period last year[8] - Total pre-tax charges related to restructuring and cost savings initiatives for the three months ended November 2, 2025, were $18 million[47] - The total estimated pre-tax costs for identified actions to date are approximately $230 million, expected to be incurred through 2028[48] - The company expects to incur expenses of up to approximately $115 million through 2029 for the Snacks direct-store-delivery initiative, with $41 million already incurred as of November 2, 2025[52] - Annual ongoing savings of approximately $375 million are anticipated by the end of 2028 from the cost savings initiatives, with total program-to-date pre-tax savings of $160 million as of November 2, 2025[128] Acquisitions and Divestitures - The company completed the sale of its Pop Secret popcorn business for $70 million, recognizing a pre-tax loss of $25 million[29] - The noosa yoghurt business was sold for $188 million, with net sales of $44 million for the three-month period ended October 27, 2024[30] - The company entered into purchase agreements to acquire 49% of La Regina for an aggregate consideration of $286 million, payable in two tranches[97] Stock and Share Repurchase - The company repurchased 748 thousand shares at a cost of $24 million during the three-month period ended November 2, 2025[78] - The company has a strategic share repurchase program of up to $500 million approved in September 2021, with no expiration date[157] Expenses and Costs - The total cost of products sold for the three months ended November 2, 2025, was $1.885 billion[66] - The total interest expense for the three months ended November 2, 2025, was $81 million[66] - Marketing and selling expenses as a percentage of sales increased to 9.5% in 2026 from 9.0% in 2025, primarily due to higher costs associated with cost savings initiatives[114] - Administrative expenses decreased by 5% in 2026, with a percentage of sales at 6.2% compared to 6.3% in 2025[115] Tax and Compliance - The effective tax rate increased to 24.2% in 2026 from 23.2% in 2025, primarily due to excess tax benefits in the prior year and shortfalls related to stock-based compensation[122] - The company is subject to a 1% excise tax on share repurchases in excess of issuances, enacted by the Inflation Reduction Act[157] Risk Management - The company anticipates potential risks from financial market volatility, supply chain disruptions, and competitive responses affecting its market share in snacks, soups, sauces, and beverages[149] - The company is actively managing risks related to commodity price volatility and supply chain inputs[149] Other Financial Metrics - The fair value of short- and long-term debt was $6.71 billion on November 2, 2025, compared to $6.545 billion on August 3, 2025[75] - The company has outstanding obligations under supplier finance programs amounting to $264 million as of November 2, 2025[95] - The company maintained a cash margin asset balance of $3 million as of November 2, 2025[64]