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Category: Stock Market and Campbell Soup
Date: 2 September 2019 Stock Price: $45 We take a look at the 4th quarter earnings report for the 2019 fiscal year of Campbell's the multinational food company.
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About Campbell's Soup Company
Campbell Soup Company (NYSE:CPB) is a multi-national food company headquartered in Camden, N.J., with annual sales of approximately $8.1 billion. We make a range of high-quality soups and simple meals, beverages and snacks. Our company is driven and inspired by our purpose: Real food that matters for life’s moments. For generations, people have trusted us to provide authentic, flavorful and readily available foods and beverages that connect them to each other, to warm memories, and to what’s important today.
Our portfolio is focused on two distinct businesses in our core North American market: Snacks and Meals & Beverages. This focus enables us to leverage iconic brands and strong positions in the market where we have the greatest presence. Led by our iconic Campbell’s brand, our portfolio extends beyond soup to foods such as Pepperidge Farm cookies including Milano and Farmhouse, Goldfish crackers, Snyder’s of Hanover pretzels, Lance sandwich crackers, Kettle Brand and Cape Cod potato chips, Late July snacks, Snack Factory Pretzel Crisps, Pop Secret popcorn, Emerald nuts, V8 beverages, Plum baby food, Swanson broths, Pregopasta sauces, Pace Mexican sauce, and Pacific Foods broths, soups and non-dairy beverages. Soup may be our middle name, but there’s much more to our company, as you will discover. We’re still Campbell, but we are changing in new and exciting ways.
Our portfolio is focused on two distinct businesses in our core North American market: Snacks and Meals & Beverages. This focus enables us to leverage iconic brands and strong positions in the market where we have the greatest presence. Led by our iconic Campbell’s brand, our portfolio extends beyond soup to foods such as Pepperidge Farm cookies including Milano and Farmhouse, Goldfish crackers, Snyder’s of Hanover pretzels, Lance sandwich crackers, Kettle Brand and Cape Cod potato chips, Late July snacks, Snack Factory Pretzel Crisps, Pop Secret popcorn, Emerald nuts, V8 beverages, Plum baby food, Swanson broths, Pregopasta sauces, Pace Mexican sauce, and Pacific Foods broths, soups and non-dairy beverages. Soup may be our middle name, but there’s much more to our company, as you will discover. We’re still Campbell, but we are changing in new and exciting ways.
Financial overview of Campbell's Soup Company's latest earnings reports
Numbers highlighted by management:
The numbers we are interested in (for the quarter)
- Fourth-Quarter Loss Per Share from Continuing Operations of $0.02
- Fourth-Quarter Net Sales and Organic Sales from Continuing Operations Increased 2 Percent
- Campbell International Reported as Discontinued Operations
- Fourth-Quarter Results Comprising Continuing Operations and Campbell International (as Previously Guided) were: Net Sales of $2.024 Billion; Adjusted Earnings Per Share (EPS) of $0.50
- Campbell Provides Fiscal 2020 Guidance for Continuing Operations
The numbers we are interested in (for the quarter)
- Net sales: $1.780 billion (up from $1,745 billion for the same quarter of the previous year)
- Total costs and expenses: $1.697 billion (up from $1.493 billion for the same quarter of the previous year)
- Net loss: -$8million (down from $94 million for the same quarter of the previous year)
- Earnings per share: -$0.03 (down from $0.31 for the same quarter of the previous year)
- Dividend declared for the quarter: $0.35 (unchanged from $0.35 for the same quarter of the previous year)
- Dividend yield: 3.1%
- Shares outstanding: 301 million
- Cash and cash equivalents: $179 million
- Cash and cash equivalents per share: $0.59
- Cash and cash equivalents makes up 1.3% of the group's current market capital
- Total equity: $1.112 billion
- Total equity per share: $3.69
- Cash generated from operations: $211 million
- Cash generated from operations per share: $0.70
- Cash generated from operations per share: $0.70
Campbell's Soup Company management commentary on the results and earnings guidance
CAMDEN, N.J.--(BUSINESS WIRE)--Aug. 30, 2019-- Campbell Soup Company (NYSE:CPB) today reported its fourth-quarter and full-year results for fiscal 2019.
CEO Perspective
Mark Clouse, Campbell’s President and CEO, stated, “Our strong fourth-quarter results culminated a year of steady, positive performance for Campbell. We delivered consistent results and met or exceeded expectations for four consecutive quarters this year. We made significant progress against our 2019 strategic initiatives, namely: improving our in-market performance; overdelivering our cost savings programs; strengthening our relationships with key retailers; focusing the portfolio on our two core businesses in North America; and, completing the divestiture of Campbell Fresh and announcing the divestiture of Campbell International. We have created a solid foundation to build upon in fiscal 2020.”
Fiscal 2020 Guidance for Continuing Operations
As shown in the table below, the company expects net sales to grow by 1 to 3 percent, adjusted EBIT to grow by 2 to 4 percent and adjusted EPS to grow by 9 to 11 percent. Fiscal 2020 comprises 53 weeks, one additional week compared to fiscal 2019. The benefit of the 53rd week is included in the fiscal 2020 guidance and is estimated to be worth 2 points of net sales, adjusted EBIT and adjusted EPS. Expected net proceeds of approximately $3 billion from the divestitures of Campbell Fresh and Campbell Internationalare being used to reduce debt. This guidance takes into account the impact of the paydown on the company’s interest expense in fiscal 2020
CEO Perspective
Mark Clouse, Campbell’s President and CEO, stated, “Our strong fourth-quarter results culminated a year of steady, positive performance for Campbell. We delivered consistent results and met or exceeded expectations for four consecutive quarters this year. We made significant progress against our 2019 strategic initiatives, namely: improving our in-market performance; overdelivering our cost savings programs; strengthening our relationships with key retailers; focusing the portfolio on our two core businesses in North America; and, completing the divestiture of Campbell Fresh and announcing the divestiture of Campbell International. We have created a solid foundation to build upon in fiscal 2020.”
Fiscal 2020 Guidance for Continuing Operations
As shown in the table below, the company expects net sales to grow by 1 to 3 percent, adjusted EBIT to grow by 2 to 4 percent and adjusted EPS to grow by 9 to 11 percent. Fiscal 2020 comprises 53 weeks, one additional week compared to fiscal 2019. The benefit of the 53rd week is included in the fiscal 2020 guidance and is estimated to be worth 2 points of net sales, adjusted EBIT and adjusted EPS. Expected net proceeds of approximately $3 billion from the divestitures of Campbell Fresh and Campbell Internationalare being used to reduce debt. This guidance takes into account the impact of the paydown on the company’s interest expense in fiscal 2020
Campbell's Soup Company (NYSE: CPB) stock price history
The image below, obtained from Google, shows the 5 year stock price history of Campbell's Soup Company. While there were a lot of ups and downs for the stock price over the last 5 years, the group is basically trading at the same price it traded at 5 years ago. So essentially the stock has moved sideways over the last 5 years.
Campbell's Soup Company (NYSE: CPB) latest stock valuation
So based on the group's current earnings report what do we value Campbell Soup Company's stock at? Our target price for Campbell's Soup Company is $49.20 a share. Our full value valuation of $49.20 a share takes the current earnings into account as well as the earnings guidance provided by the group. So at its current price CPB is trading at a 9.3% discount to our full value target price. It does offer long term fundamental investors a decent entry point into the group's stock.