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Campbell Soup Co CPB

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Campbell's Third-Quarter Slowdown Sends a Chill Through the Market, Leaving Some Upside in Shares

Erin Lash, CFA Sector Director

Analyst Note

| Erin Lash, CFA |

Campbell’s torrid pace of gains since the pandemic took hold came to a screeching halt in the third quarter. Organic sales slumped a whopping 12% (though this came on top of 17% growth in the year-ago period), while adjusted gross and operating margins contracted to the tune of 290 basis points to 31.8% and 14.3%, respectively. In light of the rash of challenges plaguing its operations (stemming from inflation, stepped up competition, and executional challenges as it integrates Snyder’s-Lance) and with just two months left in its fiscal year, management revised its full-year expectations, which now call for a 3.5%-3.0% pullback in reported sales (from a 3.5%-2.5% decline prior) and adjusted EPS of 2.90-$2.93 (from $3.03-$3.11).

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Company Profile

Business Description

With a history that dates back around 150 years, Campbell Soup is now a leading manufacturer and marketer of branded convenience food products, most notably soup. The firm's product assortment includes well-known brands like Campbell's, Pace, Prego, Swanson, V8, and Pepperidge Farm. Following the sale of its international snacking operations, the firm derives nearly all of its sales from its home turf. Campbell has made a handful of acquisitions to reshape its product mix the past few years, including the tie-up with Snyder's-Lance (completed in March 2018), which enhances its exposure to the faster-growing on-trend snack food aisle, complementing its Pepperidge Farm lineup.

Contact
1 Campbell Place
Camden, NJ, 08103-1799
T +1 856 342-4800
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Apr 30, 2021
Fiscal Year End Aug 2, 2021
Stock Type Aggressive Growth
Employees 14,500

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