Campbell Soup is scheduled to announce its fiscal first-quarter results on Wednesday morning. Here are the key details you need to know:
Earnings
Analysts predict that the soup and snack maker will report a profit of $260 million for the quarter ending on October 30th. This is a decrease from the $297 million profit recorded in the same period last year.
Adjusted Profit
When excluding one-time items, adjusted earnings are expected to be 87 cents per share. This estimate is based on forecasts from 15 analysts.
Revenue
The company, headquartered in Camden, N.J., is projected to generate $2.52 billion in revenue for the first quarter. In comparison, it earned $2.58 billion in revenue during the same quarter last year.
The stock price experienced a 13% decline over the quarter and is currently trading at $40.74.
Factors to Watch
There are a few key factors that investors will be monitoring:
Impact of GLP-1 Drugs
According to Morgan Stanley analysts, Campbell Soup and other packaged food companies may be affected by the increasing use of obesity or GLP-1 drugs, which could lead to a decrease in food spending. The analysts believe that shoppers with obesity tend to spend more on food products and speculate that these companies may experience a greater impact from the adoption of GLP-1 drugs. It remains to be seen if this impact has already affected their top line.
Acquisition Update
Campbell Soup is currently in the process of acquiring Sovos Brands, the parent company of Rao’s pasta sauces and noosa yogurt. Originally expected to close in December, the $2.7 billion deal has been delayed until mid-2024 after the Federal Trade Commission requested additional information about the transaction. Stifel analysts express concern about the regulatory review and the potential consolidation it would create in the sauce category. Investors will be eager to hear any updates regarding the deal.
Performance of Canned Soup Business
Analysts from TD Cowen noted in September that Campbell’s canned soup business and vegetable juice brands have faced significant challenges over the past four years, including declining market share and volumes. Investors will be closely watching the first-quarter results to determine if there have been any improvements in these trends.
