Campbell's Company Reports 10% Increase in Net Sales, Earnings Decline in Q1 Fiscal 2025

The Campbell's Company reported a 10% increase in net sales for the first quarter of fiscal 2025, reaching $2.772 billion, compared to $2.518 billion in the same period last year. This growth was primarily driven by a 12-point contribution from the acquisition of Sovos Brands, which added $310 million to net sales. However, net earnings attributable to the company decreased to $218 million, or $0.72 per share, down from $234 million, or $0.78 per share, in the prior year. The decline in earnings was attributed to higher interest expenses and increased marketing and administrative costs, despite a rise in gross profit.

The company's total costs and expenses rose to $2.405 billion from $2.160 billion a year earlier, with significant increases in the cost of products sold, which climbed to $1.905 billion from $1.730 billion. Marketing and selling expenses also increased to $250 million, while administrative expenses rose to $175 million. The company incurred restructuring charges of $6 million, up from $2 million in the previous year, reflecting ongoing cost-saving initiatives and integration efforts related to the Sovos Brands acquisition.

Operationally, Campbell's Meals & Beverages segment saw a 22% increase in sales, largely due to the Sovos Brands acquisition, while the Snacks segment experienced a 4% decline in sales, impacted by lower performance in third-party brands and contract manufacturing. The company reported a gross profit margin of 31.3%, consistent with the prior year, although it faced challenges from cost inflation and unfavorable net price realization. The company’s total assets increased to $16.112 billion, up from $15.235 billion, with cash and cash equivalents rising significantly to $808 million from $108 million.

Looking ahead, Campbell's management anticipates continued challenges from economic pressures, including persistent inflation affecting consumer purchasing behavior. The company plans to implement further cost-saving initiatives and optimize its supply chain to mitigate these pressures. Additionally, Campbell's has announced plans to sell its noosa yoghurt business for $200 million, which is expected to close subject to regulatory approval. The company remains focused on integrating Sovos Brands and achieving anticipated synergies while navigating a competitive landscape in the food and beverage industry.