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Campbell Soup's (CPB) Q4 Earnings Coming Up: Things to Note

Campbell Soup Company CPB is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2022 earnings on Sep 1. The Zacks Consensus Estimate for quarterly revenues is pegged at $1,975 million, suggesting a rise of 5.5% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at 56 cents per share, which indicates 1.8% growth from the figure reported in the prior-year quarter. The food company has a trailing four-quarter earnings surprise of 10.8%, on average. CPB delivered an earnings surprise of 14.8% in the last reported quarter.

For fiscal 2022, the consensus mark for revenues is pegged at $8.6 billion, indicating a 0.9% rise from the year-ago period reported figure. The consensus mark for earnings stands at $2.84 per share, suggesting a decline of 4.7% from the figure reported in the year-ago period.

Conagra Brands Price, Consensus and EPS Surprise

Conagra Brands Price, Consensus and EPS Surprise
Conagra Brands Price, Consensus and EPS Surprise

Conagra Brands price-consensus-eps-surprise-chart | Conagra Brands Quote

Factors to Note

Campbell Soup has been gaining from the strength in its brands. The company boasts a solid brand portfolio, including iconic brands like Campbell’s, Cape Cod, Goldfish, Kettle Brand, Lance, Late July, Milano, Pace and Pacific Foods, among others.

In fiscal 2021, 75% of the company’s brands increased or held share compared with the year-ago period’s levels. Management highlighted that it saw continued consumption and share growth for its key brands in the third quarter of fiscal 2022. The continuation of such trends is likely to have acted as an upside in the quarter to be reported.

The company’s focus on three important strategies to continue driving growth across the soup category also bodes well. These include reinforcing Campbell’s portfolio with solid brands, modernizing efforts, including new varieties and flavors, and undertaking significant innovation.

That said, Campbell Soup has been struggling with cost inflation. On its last earnings call, management highlighted that it expects to keep seeing continued inflationary pressure.

Management expects fiscal 2022 core inflation in the low double digits, with a greater impact in the back half of the year. Incidentally, management expects fiscal 2022 adjusted EBIT to be down 4.5 to 1.5%. Adjusted earnings per share (EPS) are envisioned in the range of $2.75-$2.85 for fiscal 2022, implying flat to down 4% for the year.

However, Campbell Soup has been on track to counter higher costs via price increases and trade optimization, supply-chain productivity improvements and cost-saving efforts. In its fiscal third-quarter earnings release, CPB raised its fiscal 2022 net sales guidance to reflect a solid year-to-date performance, projected persistent solid demand for its products and limited price elasticities amid escalated inflation.

The revised view also considers the ongoing supply recovery and better service levels. For fiscal 2022, the company expects net sales to be flat to up 1%, with organic sales growth between 1% and 2%.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Campbell Soup this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.

Campbell Soup carries a Zacks Rank #3 and has an Earnings ESP of +0.60%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat.

Hormel Foods HRL currently has an Earnings ESP of +1.45% and a Zacks Rank #3. HRL is expected to register top and bottom-line growth when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for Hormel Foods’ quarterly revenues is pegged at $3.1 billion, which suggests growth of 7.2% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Hormel Foods’ quarterly earnings has remained the same in the past 30 days at 41 cents per share, suggesting an improvement of 5.1% from the year-ago quarter’s tally. HRL delivered an earnings beat of 2.8%, on average, in the trailing four quarters.

Lamb Weston LW currently has an Earnings ESP of +2.27% and a Zacks Rank #3. The company is likely to register a bottom-line improvement when it reports first-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly EPS of 52 cents suggests a significant improvement from the 20 cents reported in the year-ago quarter.

Lamb Weston's top line is also expected to have risen year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.1 billion, which indicates an improvement of around 16% from the figure reported in the prior-year quarter. LW has a trailing four-quarter earnings surprise of 24.4%, on average.

Constellation Brands STZ currently has an Earnings ESP of +9.42% and a Zacks Rank of 3. The company is likely to register a rise in the top and bottom lines when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for STZ’s quarterly revenues is pegged at $2.5 billion, which suggests a jump of 5.7% from the figure reported in the prior-year quarter.

The consensus mark for Constellation Brands’ quarterly earnings has risen by a penny in the past 30 days to $2.76 per share. The consensus estimate for STZ’s quarterly earnings suggests a rise of nearly 16% from the year-ago quarter’s reported figure. Constellation Brands delivered an earnings surprise of 4.4%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Campbell Soup Company (CPB) : Free Stock Analysis Report
 
Hormel Foods Corporation (HRL) : Free Stock Analysis Report
 
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