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Factors Setting the Tone for Campbell's (CPB) Q1 Earnings

Zacks Equity Research

Campbell Soup Company CPB is scheduled to release first-quarter fiscal 2020 results on Dec 4. This branded convenience food products company delivered a positive earnings surprise of 2.4% in the last reported quarter. Also, its earnings outperformed the Zacks Consensus Estimate by 12.2%, on average, in the trailing four quarters.

However, the Zacks Consensus Estimate for first-quarter earnings has declined a penny over the past 30 days to 70 cents per share. This suggests a decrease of 11.4% from the year-ago period’s reported figure. The consensus mark for revenues is pegged at roughly $2.23 billion, indicating a fall of 17.4% from the figure reported in the year-ago quarter.

Campbell Soup Company Price and EPS Surprise

Campbell Soup Company Price and EPS Surprise

Campbell Soup Company price-eps-surprise | Campbell Soup Company Quote

Key Factors to Note

Campbell has been focusing on strengthening the presence of its growing snack brands and improving the performance of the U.S. soup business for a while now. To this end, the company has been spending extensively on its marketing strategies. However, incremental marketing investments have been denting margins to an extent. Again, cost inflation has been a persistent headwind.

Nonetheless, Campbell’s cost-saving actions bode well. Also, the company has been focusing on refining the portfolio, as part of which it offloaded the Campbell Fresh unit earlier this year. This has helped the company increase focus on areas with better potential, like the Snacks division.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Campbell this time around. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Campbell carries a Zacks Rank #3 but an Earnings ESP of -0.12%.

Stocks With Favorable Combinations

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

Costco COST currently has an Earnings ESP of +1.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

lululemon athletica LULU presently has an Earnings ESP of +0.73% and a Zacks Rank #3.

Dollar General DG currently has an Earnings ESP of +0.47% and a Zacks Rank #3.

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Campbell Soup Company (CPB) : Free Stock Analysis Report
 
lululemon athletica inc. (LULU) : Free Stock Analysis Report
 
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
Dollar General Corporation (DG) : Free Stock Analysis Report
 
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