Campbell Soup Company CPB is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 earnings on Aug. 29. The Zacks Consensus Estimate for revenues is pegged at $2.31 billion, which suggests an increase of 11.5% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 62 cents per share. This indicates growth of 24% from the year-ago quarter’s reported figure. CPB has a trailing four-quarter earnings surprise of 3.9%, on average.
Things to Note About CPB’s Upcoming Release
Campbell Soup has been gaining from its focus on prioritizing execution, innovation and strong collaboration with retail partners to stay relevant and succeed by delivering both quality and value. The positive trends in market share growth and stabilizing volumes despite a dynamic operating landscape are encouraging and are likely to contribute to the upcoming results.
Campbell Soup's Snacks division is well-positioned, driven by the strength of its power brands and strategic optimization initiatives. Despite the current challenges, the division's resilience and long-term growth potential make it a vital component of the company's overall portfolio. Although there has been a recent slowdown due to prolonged economic pressure on lower and middle-income consumers, this modest slowdown is less severe than other edible categories, reflecting the enduring consumer demand for snacks.
Campbell Soup Company Price, Consensus and EPS Surprise
Campbell Soup Company price-consensus-eps-surprise-chart | Campbell Soup Company Quote
The upcoming results are likely to reflect contributions from the Sovos Brands acquisition, which was concluded in March 2024 and added seven percentage points to the company’s reported net sales growth in the third quarter. The performance of Sovos Brands, particularly Rao's, has been outstanding, with sales growing faster than expected, contributing positively to adjusted EBIT.
However, Campbell Soup remains affected by a dynamic macroeconomic scenario. The company is witnessing volatile consumer behaviors, especially among lower-income segments. The persistence of these headwinds could be a concern. The company now expects organic net sales growth to be nearly flat to down 1% in fiscal 2024. In its third-quarter earnings release, management stated that it was then tracking toward the midpoint of this updated organic sales growth view, indicating the consumer recovery pace.
CPB witnessed core inflation in the low single digits during the third quarter and expects it to remain within this range for the remainder of fiscal 2024. The company remains focused on managing areas of its portfolio affected by the rising cost of inputs, including tomatoes, olive oil and cocoa, as well as ongoing inflation in labor and warehousing expenses. However, its productivity initiatives and cost-savings programs are likely to balance the impact of inflation in the fourth quarter. Our model suggests an adjusted gross margin expansion of 50 basis points to 31.1% in the fourth quarter.
What the Zacks Model Unveils for CPB
Our proven model doesn’t conclusively predict an earnings beat for Campbell Soup this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Campbell Soup carries a Zacks Rank #3 and has an Earnings ESP of -0.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some companies worth considering, as our model shows that these have the correct combination to beat on earnings this time.
American Eagle Outfitters AEO currently has an Earnings ESP of +1.97% and a Zacks Rank of 3. The company is likely to register bottom and top-line growth when it reports second-quarter fiscal 2024 results. The consensus mark for AEO’s quarterly revenues is pegged at $1.3 billion, which indicates an 8.7% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for AEO’s quarterly earnings has moved up a penny in the past 30 days to 38 cents. The consensus estimate indicates growth of 52% from the year-ago quarter’s actual.
Costco Wholesale Corporation COST currently has an Earnings ESP of +0.89% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COST’s quarterly revenues is pegged at $80.1 billion, which suggests growth of 1.4% from the year-ago quarter’s reported figure.
The consensus estimate for Costco’s earnings has remained unchanged in the past 30 days at $5.02. The consensus mark for earnings indicates growth of 3.3% from the year-ago quarter’s reported figure. COST delivered an earnings beat of 2.3%, on average, in the trailing four quarters.
Burlington Stores BURL has an Earnings ESP of +2.68% and a Zacks Rank of 3 at present. BURL is expected to register top and bottom-line growth when it posts second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for its quarterly earnings has increased by a penny in the past seven days to 95 cents. The consensus mark for earnings indicates a 58.3% surge from the figure reported in the year-ago quarter.
The consensus estimate for quarterly revenues is pegged at $2.42 billion, which calls for a rise of 11.2% from the top line reported in the year-ago quarter. BURL delivered a trailing four-quarter average earnings surprise of 21.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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