Campbell Soup Posts Strong Q3 Earnings, Lifts FY2024 Outlook

Campbell Soup beats expectations in Q3, credits success to Sovos Brands acquisition. Raises fiscal 2024 guidance, stock rises 1.4%.

Campbell Soup Company (NYSE:CPB) has delivered a stellar performance in the third quarter of fiscal 2024, exceeding analyst expectations with an adjusted EPS of $0.75, a $0.04 improvement over the projected $0.71. Revenue also outperformed forecasts, reaching $2.37 billion compared to the expected $2.33 billion.

The company credits its strong quarterly results to a steady increase in volume, stable organic net sales, and impressive double-digit growth in adjusted EBIT and EPS. The recent acquisition of Sovos Brands has played a crucial role in driving this success, contributing significantly to incremental growth. President and CEO Mark Clouse is optimistic about the integration of Sovos Brands, emphasizing its substantial impact on the company's growth trajectory amidst ongoing consumer recovery.

In light of its solid performance, Campbell Soup has revised its full-year fiscal 2024 guidance to reflect the combined strength of the base business and the Sovos Brands acquisition. The updated forecast anticipates a reported net sales growth of 3% to 4%, with organic net sales expected to fall within a range of 0% to a 1% decline. This adjustment marks a slight decrease from the previously forecasted range of 0% to 2% growth.

Adjusted EBIT is projected to increase by approximately 6.5% to 7%, driven by the partial year contribution from the Sovos Brands acquisition, integration savings, and robust base business performance. Adjusted EPS for the combined entity is forecasted to grow by 2% to 3%, reaching $3.07 to $3.10, up from $3.00 in the prior year.

The positive earnings report and upgraded guidance have resulted in a 1.4% rise in Campbell Soup's stock, signaling investor confidence in the company's strategic direction and operational execution.

Looking ahead to the fourth quarter, Campbell Soup is poised to maintain its momentum, with expectations of continued volume growth year-over-year and double-digit increases in both adjusted EBIT and EPS, as well as ongoing advancements in the Sovos Brands integration.