Summary of Campbell's Earnings Conference

Campbell Soup Company

held its earnings conference Friday February 14th 2014, the stock ended up five percent. Speaking at the conference was Jennifer K. Driscoll(Vice President of Investor Relations), Denise Morrison (President and CEO), Craig Owens(Senior Vice President CFO and Chief Administrative Officer), Anthony DiSilvestro (Senior Vice President of Finance) and Anna Choi (Senior Manager of Investor Relations). Jennifer Driscoll started out the conference by stating a few key points: • “We recorded a loss of $9 million on foreign exchange forward contracts used to hedge the proceeds from the sale of our European Simple Meals business. In addition, we recorded tax expense of $7 million associated with that sale.” • “Last year in the second quarter, we recorded a pre-tax restructuring charge and related costs of $48 million related to our U.S. supply chain in Mexico. In the first quarter, we recorded $10 million in transaction costs for Bolthouse and $43 million in restructuring charges and related costs, related to U.S. supply chain initiatives.” Next was Denise Morrison, who is the CEO of the iconic soup company: • “In the second quarter, we delivered growth of 6% and reported net sales 15% in adjusted EBIT and 19% in adjusted EPS from continuing operations, which increased to $0.76.” • “We delivered 3% organic sales growth in our core business, led by higher sales in U.S. Simple Meals, Pepperidge Farm and Bolthouse Farms.” • “U.S. Soup shipments increased in the second quarter driving 5% sales growth. The late timing of the Thanksgiving holiday season also helped U.S. Soup and Pepperidge Farm as it pushed shipments into the second quarter as we expected.” • “We expect to grow organic sales by around 2% and acquisition should contribute about 3% to our sales growth. For the full year, the extra week in the fiscal year will largely be offset by currency.” • “For the full year, we continue to expect to deliver net sales growth of 4% to 5%, adjusted EBIT growth of 4% to 6%, and adjusted EPS growth of 2% to 4%.” • “In summary, we are optimistic about our plans for the second half of the year and believe that with solid execution, our full year guidance is both reasonable and attainable.” Next was Craig Owens, the CFO of the company: • “In the quarter, the company recognized a net gain of $90 million after-tax or $0.28 per share from that sale.” • “We reported second quarter net sales of $2.3 billion, a 6% increase from the prior year.” • “U.S. Beverage sales declined by 3% to $176 million, the decrease in sales was driven by declines across the portfolio primarily due to the impact of the transition to a new distribution network in single-serve immediate consumption channels. In take-home channels we saw positive trends for V8 Red and for Splash beverages.” • “Campbell had a 59.4% market share, an increase of 20 basis points for the year. All other branded players collectively had a share of 28% and private label was at 13%.” • Unfortunately, Cash flow declined a bunch; the company says that it was due to taxes paid on the divestiture and lower cash earnings in fiscal 2014. “Cash flow from operations was $363 million compared with $499 million in the prior year.” Overall the company ended the conference call of a positive note and the stock price of the iconic coup company surged upward about five percent or $2.04.