Campbell shares rose after the company posted its 2Q16 results, with EPS of 87 cents surpassing analyst expectations of 80 cents, and revenues down 1% to $2.2 billion in line with Wall Street expectations.
Campbell shares rose after the company posted its 2Q16 results, with EPS of 87 cents surpassing analyst expectations of 80 cents, and revenues down 1% to $2.2 billion in line with Wall Street expectations.“We’re pleased with our results this quarter, especially our strong profit performance across all three segments,” said Denise Morrison, Campbell’s President and Chief Executive Officer. “The highlight of the quarter was our continued gross margin expansion, which reflects improvements in productivity, net price realization and improved supply chain execution. Our three-year cost savings program is also performing better than anticipated, and we have raised our 2018 target to $300 million.”“Organic sales for the quarter were comparable to prior year, a bit below our expectation. While our Global Biscuits and Snacks division stands out for delivering both organic sales growth and strong profit growth in the quarter, we’re making investments in all the divisions toward our objective of accelerating sales growth over time.”“Over the last 12 months, we’ve implemented significant changes to the company, including aligning our enterprise structure with our strategy, creating clear portfolio roles for our divisions and undertaking our major cost savings initiative. I feel very good about the progress we’ve made, however, we are aware that we have more work to do. We’re now better positioned to execute our strategies and to invest in the areas of our business that hold the greatest potential.”Sales decreased 1 percent to $2.201 billion driven by lower volume and the adverse impact of currency translation, partly offset by higher selling prices, the benefit from the acquisition of Garden Fresh Gourmet and lower promotional spending. Organic sales were comparable to the prior year with gains in Global Biscuits and Snacks offset by declines in Americas Simple Meals and Beverages.Gross margin increased from 33.3 percent to 37.2 percent. Excluding items impacting comparability in the current year, adjusted gross margin improved 4 percentage points. The increase in adjusted gross margin was primarily driven by productivity improvements, higher selling prices, lower promotional spending and improved supply chain performance.Marketing and selling expenses decreased 7 percent to $223 million. Excluding items impacting comparability in the current year, adjusted marketing and selling expenses decreased 5 percent to $226 million primarily due to the benefits from cost savings initiatives, partly offset by higher advertising and consumer promotion expenses. Administrative expenses increased 8 percent to$146 million. Excluding items impacting comparability in the current year, adjusted administrative expenses increased 6 percent to$143 million primarily due to higher incentive compensation costs compared to the prior year, partly offset by the benefits from cost savings initiatives.