What to expect when Campbell Soup (CPB) reports third-quarter 2024 earnings

Shares of Campbell Soup Company (NYSE: CPB) rose more than 1% on Friday. Over the last 12 months, the company’s shares have fallen 14%. The food company is scheduled to report third-quarter 2024 results on Wednesday, June 5, before the market opens. Here’s what you can expect from the report:

Income

Analysts forecast revenue of $2.35 billion in the third quarter of 2024. This compares to net sales of $2.23 billion recorded during the same period last year. In the second quarter of 2024, net sales decreased 1% year-over-year to $2.5 billion.

Profits

The consensus EPS estimate for Q3 2024 is $0.70, compared to EPS of $0.68 reported in the year-ago quarter. In Q2 2024, adjusted EPS remained unchanged at $0.80.

Points worth noting

As indicated in its most recent quarterly earnings call, Campbell expects modest, sequential improvement in its revenues through the end of fiscal 2024. The company expects flat to low-single-digit organic net sales growth in the third quarter of 2024 and continued improvement in the fourth quarter.

The soup maker faces challenges from a slowing category and a difficult economic environment. However, it expects to benefit from the trend of consumers prioritizing value, choosing to cook meals at home and buy foods that allow them to prepare stretchable meals, thus reducing the frequency of purchases. Campbell believes the soup offering can meet these needs.

Last quarter, Campbell’s food and beverage segment saw a 2% decline in sales, with a 3% decline for American soups. Sales in the Snacks segment remained flat, but the company benefited from the strength of its powerful brands.

Campbell has completed the acquisition of Sovos Brands and the addition of the latter’s products to its portfolio is expected to drive significant growth. Campbell plans to discuss the impact of the acquisition on its 2024 outlook in its third-quarter report.

Another issue of note is the company’s recent decision to close its plant in Tualatin, Oregon, and make changes to production at its plant in Jeffersonville, Indiana. These actions will result in the reduction of 415 jobs. At the same time, Campbell is investing approximately $230 million in newer facilities to drive growth, and these projects are expected to create 210 new positions across the organization.

In its most recent earnings call, Campbell said it expects earnings growth and margin improvement in the second half of fiscal 2024. The company said it expects third-quarter adjusted EPS to be in the lower $0.70 range.