Campbell Soup posted stronger-than-expected third quarter earnings on Wednesday, and boosted its full-year profit outlook.
Much of this positive activity is being credited to U.S. snack sales following last year’s $6.1 billion purchase of Snyder’s-Lance.
Campbell Soup said adjusted earnings for the three months ending on April 28 came in at 56 cents per share, down 5% from the same period last year but firmly ahead of the Wall Street consensus forecast of 47 cents per share.
Group revenues, Campbell’s said, rose 12% to $2.388 billion, again topping analysts’ estimates of a $2.35 billion tally.
Looking into its 2019 fiscal year, Campbell said it sees net sales in the range of $9.075 billion to $9.125 billion, and adjusted earnings of between $2.50 and $2.55 per share.
“Our results this quarter were ahead of our expectations, making it the third consecutive quarter that we met or exceeded our outlook,” Campbell CEO Mark Clouse said on Wednesday. “I am also pleased to see profitability trends are improving, driven by sequential gross margin improvement.”
“In the quarter, we continued to drive sales growth in global biscuits and snacks, fueled by our U.S. snacks portfolio. The business continues its growth trends on Pepperidge Farm, coupled with improvements in the Snyder’s-Lance portfolio,” Clouse added. “In the meals and beverages segment, although there is more to do, we are making steady improvements on gross margin and profit and this business is showing signs of stabilization.”
Campbell Soup shares were marked 7.5% higher following the earnings release, indicating an opening bell price of $40.97 each, a move that would extend the stock’s year-to-date gain to just over 24%.
“Despite the uncertainty surrounding the economy, the vast majority of S&P earnings announced during the recent months surprised on the upside,” Tim Barron, SVP and chief investment officer at Segal Marco Advisors, told CFO. “And Campbell’s certainly continues that recent trend.”
In other activity for the company, on April 12, 2019, Campbell announced that it had entered into an agreement to sell its Bolthouse Farms business.
As a result of this, and along with the recently completed divestitures of the U.S. refrigerated soup and Garden Fresh Gourmet businesses in the third quarter of fiscal 2019, Campbell Fresh is now reported as discontinued operations.
The company, headquartered in Camden, New Jersey, is a U.S. producer of canned soups and related products that are sold in 120 countries worldwide.