Things to Note as Campbell Soup (CPB) Readies for Q3 Earnings
Campbell Soup Company CPB is likely to register top and bottom-line growth when it reports third-quarter fiscal 2022 earnings on Jun 8. The Zacks Consensus Estimate for quarterly revenues is pegged at $2,037 million, suggesting a rise of 2.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at $2.78 per share, indicating 7% growth from the figure reported in the prior-year quarter. This manufacturer and marketer of food and beverage products has a trailing four-quarter earnings surprise of 3.7%, on average. In the last reported quarter, the company delivered an earnings surprise of 1.5%.
Campbell Soup Company Price, Consensus and EPS Surprise
Campbell Soup Company price-consensus-eps-surprise-chart | Campbell Soup Company Quote
Things to Consider
On its second-quarter fiscal 2022 earnings call, Campbell Soup stated that it expects its second wave of pricing to be reflected in the third quarter. CPB anticipates managing inflation with pricing, supply-chain productivity enhancements and saving endeavors. These factors, together with a better labor outlook and easier year-over-year comparisons, are likely to lead to margin progress and earnings recovery in the second half of fiscal 2022. Management also expects a better second-half performance as it laps easier prior-year comparisons.
Campbell Soup has been benefiting from its growing Snacks business. The company’s Snacks Power brands continue to fuel its performance. Further, the company’s focus on its three important strategies, aimed at driving growth across the soup category, bodes well. These include reinforcing Campbell Soup’s portfolio with solid brands, modernizing efforts, including new varieties and flavors, and significant innovation.
However, CPB has been struggling with cost inflation for a while. On its last earnings call, the company said that it expects inflation to persist in fiscal 2022, especially due to logistics. Core inflation is likely to be in the low double-digits for the full year. Management expects the impact to be more prevalent in the second half of the fiscal. That said, the company has been progressing well with its savings plan. The company’s strategy of concentrating on supply-chain efficiencies, along with curtailing costs and reinvesting part of these savings in areas with high growth potential, is noteworthy.
What the Zacks Model Unveils
Our proven model does not conclusively predict 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. However, that is not the case here.
Campbell Soup currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some companies worth considering as our model shows that these have the right combination of elements to beat earnings this season:
Kroger KR currently has an Earnings ESP of +1.65% and a Zacks Rank #2. The company is expected to register bottom-line growth when it reports first-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.27 suggests an increase of 6.7% from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kroger’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $43.6 billion, indicating an increase of 5.5% from the year-ago quarter’s levels. KR has a trailing four-quarter earnings surprise of 22.1%, on average.
Casey's General Stores CASY currently has an Earnings ESP of +0.38% and a Zacks Rank of 3. Casey's General Stores is anticipated to register a top-line increase from the last fiscal year’s quarterly reading when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for CASY’s revenues is pegged at $3,439 million, indicating a rise of 44.6% from the figure reported in the prior fiscal year’s quarter.
The Zacks Consensus Estimate for Casey's General Stores’ quarterly earnings is pegged at $1.54 per share, suggesting an improvement of 37.5% from the last fiscal year’s quarterly number. The company has a trailing four-quarter earnings surprise of 21.6%, on average.
Chipotle Mexican Grill CMG currently has an Earnings ESP of +2.26% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports second-quarter fiscal 2022 earnings. The consensus mark for Chipotle Mexican’s quarterly revenues is pegged at $2.24 billion, which suggests an 18.6% growth from the figure reported in the prior-year quarter.
The consensus mark for quarterly earnings is pegged at $9.06 per share. The consensus estimate for CMG suggests growth of 21.5% from the year-ago quarter’s levels. Chipotle Mexican has a trailing four-quarter earnings surprise of 9.3%, on average.
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