CPB Financial Analysis

Analysis Date: 1/24/2025

Business Model

Campbell generates revenue primarily through two segments: Meals & Beverages and Snacks

Revenue Sources

• Meals & Beverages segment (55% of FY2024 revenue) - includes soup, simple meals and beverage products
• Snacks segment (45% of FY2024 revenue) - includes Pepperidge Farm cookies, crackers, snacks and frozen products

Revenue Distribution by Channel

• Retail and foodservice channels in US and Canada

Income Statement Analysis

• Net sales increased 11% to $2.3B driven by Sovos Brands acquisition
• Organic net sales decreased 1% with net price realization down 2%, partially offset by 1% favorable volume/mix
• Gross profit margin decreased to 29.4% from 31.7% mainly due to acquisition impacts

Balance Sheet Analysis

• Total assets increased 26% to $15.2B primarily due to Sovos Brands acquisition
• Intangible assets increased 38% reflecting acquired brands and goodwill

Cash Flow Analysis

• Operating cash flow increased 4% to $1.19B
• Capital expenditures increased 40% to $517M

Capital Allocation

Campbell returned $512M to shareholders in FY2024 through $445M in dividends and $67M in share repurchases. The company maintains $301M remaining under its $500M strategic share repurchase program.

Management Commentary

Solid fourth-quarter performance including sequential volume improvement and margin expansion

Integration of Sovos Brands progressing ahead of expectations

Slower pace of recovery and increased competition in snacks segment

Overall Sentiment: Cautiously optimistic with focus on execution and integration while navigating evolving consumer environment

Recommendation

Rating: Hold

Reason for Rating: Mixed performance across segments with integration execution key to future growth

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/24/2025, 5:05:13 AM