Campbell Soup Company (CPB) is a multinational food company with a portfolio of soups, simple meals, beverages and snacks.
The company generated 53% of its revenue from meals and beverages and 47% from snacks in fiscal year 2020, although meals and beverages accounted for about 64% of earnings. After divesting its international business lines, sales outside of the United States represented only about six percent of fiscal 2020 net sales, primarily in Canada.
Management targets long-term 1-2% organic sales growth, 4-6% adjusted EBIT and 7-9% adjusted earnings per share. With U.S. soup consumption rising 15.3% during FY2020, the company is well positioned with its Campbells, V8 and other leading brands. Snack consumption, in which the company has several leading brands, saw a similar increase of 11%.
Growth with Soft Guidance
Campbell Soup revenue rose by 7.3% to $2.34 billion during the fiscal first quarter, beating consensus estimates by $20 million, while non-GAAP earnings came in at $1.02 per share, beating consensus estimates by eleven cents per share. However, the company’s fiscal second-quarter guidance of 5-7% growth and adjusted EPS of $0.81-$0.83 missed expectations.
The company raised its quarterly payable dividend by 5.7% to 37 cents per share following the strong quarter, which represents a 3.07% forward yield. The dividend is payable on February 1, 2021, to shareholders on record as of January 9, 2020.
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