What to expect when Campbell Soup (CPB) reports its Q2 earnings next week

Shares of Campbell Soup Company (NYSE: CPB ) fell 1% on Friday. The stock has gained 13% over the past 12 months. The processed food company is scheduled to report its second-quarter 2023 earnings results on Wednesday, March 8, before the market opens. Here’s what to expect from an income statement:

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Analysts project revenue of $2.45 billion for Campbell in the second quarter of 2023. This is compared to $2.20 billion reported in the second quarter of 2022. In the first quarter of 2023, net sales increased 15% year-over-year to $2.57 billion.

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The consensus target is for EPS of $0.74 in Q2 2023, which compares to adjusted EPS of $0.69 in Q2 2022. In Q1 2023, adjusted EPS rose 15% YoY to $1.02.

Points to note

In the first quarter of 2023, Campbell’s results benefited from price increases implemented to address inflationary pressures. However, these gains were partially offset by volume declines. Sales rose double-digit in the Snacks and Meals & Beverages segments helped by consumer demand and brand strength.

In an inflationary environment, consumers are cutting back on eating out and preparing more meals at home. They are also trying to reduce their grocery budgets by moving into cheaper categories. Campbell’s product portfolio provides consumers with several affordable options for preparing quick meals at home. The trend is likely to benefit the company during the second quarter.

Higher cost inflation and unfavorable volumes and a sick mix in Q1, with gross profit margins down 30 basis points YoY. The company is working to mitigate these impacts through price increases, supply chain productivity improvements and cost-saving initiatives.

In January, Campbell said it was consolidating the Snacks offices in North Carolina and Connecticut into a headquarters in Camden, New Jersey. The move is expected to result in cost savings and help improve margins in the Snacks division. Campbell has also appointed a new Chief Financial Officer, Carrie Anderson. Updates on these new initiatives as well as new strategies are areas to watch out for.

Click here to read the full transcript of Campbell Soup Company’s Q1 2023 earnings conference call