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Campbell Soup Company Q4 sales down 1 percent

Staff Writer | August 31, 2017
Campbell Soup Company reported its fourth-quarter results. Sales decreased 1 percent to $1.664 billion driven by a 1 percent decline in organic sales, reflecting lower volume.
Campbell Soup Company
Campbell Soup Company   Gross margin increased from 32.4 percent to 43.0 percent
Gross margin increased from 32.4 percent to 43.0 percent. Excluding items impacting comparability, adjusted gross margin increased 0.8 percentage points from 36.1 percent to 36.9 percent.

The increase in adjusted gross margin was primarily driven by productivity improvements and the benefits from cost savings initiatives, partly offset by cost inflation and higher supply chain costs.

Marketing and selling expenses decreased 34 percent to $143 million. Excluding items impacting comparability, adjusted marketing and selling expenses decreased 12 percent primarily due to lower advertising and consumer promotion expenses lapping marketing levels above historical levels in the prior-year quarter and the benefits from cost savings initiatives.

Administrative expenses decreased 54 percent to $86 million. Excluding items impacting comparability, adjusted administrative expenses decreased 5 percent primarily due to the benefits from cost savings initiatives.

The company reported EBIT of $440 million as compared to a loss of $37 million in the prior-year quarter.

Excluding items impacting comparability, adjusted EBIT increased 11 percent to $282 million, reflecting lower adjusted marketing and selling expenses, as well as a higher adjusted gross margin percentage, partly offset by lower sales.

Net interest expense decreased 18 percent to $23 million. Excluding items impacting comparability in the current year, adjusted net interest expense increased $1 million to $29 million, reflecting higher average interest rates on the debt portfolio, partly offset by lower average levels of debt.

The tax rate was 23.7 percent as compared to 24.6 percent in the prior year. Excluding items impacting comparability, the adjusted tax rate increased 0.8 percentage points to 37.2 percent.

The company reported EPS of $1.04 in the quarter. Excluding items impacting comparability in both periods, adjusted EPS increased 13 percent to $0.52 per share, compared with $0.46 per share in the year-ago quarter.

Full-year results

Sales decreased 1 percent to $7.890 billion driven by a 1 percent decline in organic sales, reflecting lower volume and higher promotional spending.

EBIT increased from $960 million to $1.400 billion. Excluding items impacting comparability, adjusted EBIT increased 2 percent to $1.492 billion, reflecting a higher adjusted gross margin percentage and lower adjusted administrative expenses, due in part to lower incentive compensation costs, partly offset by lower sales volume.

Net interest expense decreased 4 percent to $107 million. Excluding items impacting comparability in the current year, adjusted net interest expense increased $2 million to $113 million, reflecting higher average interest rates on the debt portfolio, partly offset by lower average levels of debt.

The tax rate decreased 2.3 percentage points to 31.4 percent. Excluding items impacting comparability, the adjusted tax rate decreased 0.2 percentage points to 32.4 percent.

The company reported EPS of $2.89. Excluding items impacting comparability in both years, adjusted EPS increased 3 percent to $3.04 per share, compared with $2.94 per share a year ago.

Cash flow from operations was $1.291 billion as compared to $1.491 billion a year ago.

The year-over-year decline was primarily due to lapping significant working capital reductions in the prior year, as well as lower cash earnings and lower receipts from hedging activities in the current year.


 

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