Campbell’s Q1 Fiscal 2021 Results Show Growth

Campbell Soup Company reported results for its first-quarter fiscal 2021 and announced a 6% increase to its quarterly dividend.

Net sales increased 7% to USD2.34bn driven by gains in both Meals & Beverages and Snacks. Organic net sales grew 8% driven by a 6% increase in volume and mix and a 2% increase from lower levels of promotional spending, according to the company’s report. The volume increase reflected heightened demand as at-home food consumption remained elevated as a result of the COVID-19 pandemic as well as improved retailer soup inventories. Organic net sales exclude the impact of the sale of the European chips business in fiscal 2020.

Gross margin increased from 33.8% to 34.7%. Excluding items impacting comparability in the current year, adjusted gross margin increased 100 basis points to 34.8% driven primarily by moderated promotional spending and favorable mix, offset partly by slightly higher net supply chain costs as productivity improvements and improved operating leverage were more than offset by cost inflation, other operational costs and COVID-19 related costs.

“Fiscal 2021 is off to a strong start with first-quarter sales growth across both divisions and double-digit gains in EBIT and EPS. Our Meals & Beverages division continued to drive impressive sales and margin growth as we positioned our brands to align with macro consumer trends, and retailers rebuilt inventory for the holidays and the heart of the soup season. Snacks continued to deliver strong results while increasing capacity in key power brands. We continue to build a high-performing Snacks business with differentiated brands and improving margins,” said Mark Clouse, Campbell’s president and CEO. “The Board approved a 6% increase in our quarterly dividend, reflecting the company’s strong earnings performance, cash flows, and increasing confidence in our long-term growth prospects, as well as our continued commitment to shareholder returns.”

In the first quarter of fiscal 2021, Campbell Soup Company achieved USD15m in savings under its multi-year cost savings program, inclusive of Snyder’s-Lance synergies, bringing total program-to-date savings to USD740m. Campbell remains on track to deliver annualized savings of USD850m by the end of the fiscal year 2022.

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