Campbell: Raises 2016 Full-Year Earnings Guidance

Camden / NJ. (csc) Campbell Soup Company announced that the company is raising its full-year earnings guidance for fiscal 2016, based on better-than-expected results for the second quarter. For the full fiscal year, Campbell still expects the year-over-year change in net sales to be in the range of -1 to 0 percent. The company now expects adjusted Earnings Before Interest and Taxes (Ebit) to increase by 10 to 13 percent (previously 4 to 7 percent), and adjusted Earnings Per Share (EPS) to increase by 9 to 12 percent (previously 4 to 7 percent), or 2.88 USD to 2.96 USD per share. This guidance includes the impact of currency translation, which is now estimated to have a 2 percentage point negative impact (previously negative 3 percentage points), as well as the 1 percentage point positive impact of the Garden Fresh Gourmet acquisition.

(USD in millions, except per share)		Fiscal 2015 Results		Estimated Currency Translation Impact		Garden Fresh Gourmet Acquisition		Revised 2016 Guidance
Net Sales		USD 8’082		-2 pts		+1 pt		-1 to 0%
Adjusted Ebit*		USD 1’316		-2 pts		+1 pt		+10 to +13%
Adjusted EPS*		USD 2.65		-2 pts -USD 0.06		?		+9 to +12% USD 2.88 to USD 2.96

 
The changes in guidance for adjusted Ebit and adjusted EPS are due primarily to Campbell’s improved gross margin performance and cost savings. The company’s three-year cost savings initiative is delivering better-than-expected results. As a result, Campbell is increasing its savings target from 250 million USD to 300 million USD, which it expects to achieve by the close of fiscal 2018. The company now expects 120 million USD to 140 million USD in incremental savings from these cost reduction initiatives in fiscal 2016, compared to its previous estimate of 80 million USD to 100 million USD.

Preliminary Second-Quarter Results

Campbell will report its results for the second fiscal quarter ended Jan. 31, 2016, on Thursday, Feb. 25. The company estimates that reported net sales for the second quarter will decline by approximately 1 percent reflecting the negative impact of currency translation, partly offset by the acquisition of Garden Fresh Gourmet. Organic net sales are expected to be comparable to the prior year. The company estimates that second-quarter adjusted Ebit will increase by approximately 26 percent, due primarily to improved gross margin performance and cost savings. Adjusted EPS for the quarter is estimated at approximately 0.87 USD per share.

(USD in millions, except per share)		Three Months Ended
		Jan. 31, 2016*		Feb. 01, 2015		Change
Net Sales
As Reported (GAAP)		USD 2’201		USD 2’234		(1)%
Organic						-%
Earnings Before Interest and Taxes
As Reported (GAAP)		USD 414		USD 337		23%
Adjusted		USD 423		USD 337		26%
Diluted Earnings Per Share
As Reported (GAAP)		USD 0.85		USD 0.71		20%
Adjusted		USD 0.87		USD 0.71		23%
*Estimated Results