Campbell Soup Company ( NYSE: CPB ) traded lower in early Thursday action after a largely in-line FQ4 earnings report . The food giant's commentary on inflation pressure may be impacting sentiment with investors.
Organic sales increased 6% in FQ4. The impact of inflation-driven pricing and sales allowances of 14% during the quarter more than offset volume declines of 4% and increased promotional spending of 3%.
Adjusted gross margin increased 40 basis points to 31.3% of sales due to the mitigation of on-going inflation with pricing actions, supply chain productivity improvements and cost savings initiatives, partially offset by increased promotional spending and unfavorable volume/mix.
Adjusted EBIT increased 5% during the quarter primarily due to higher adjusted gross margin, partially offset by higher adjusted administrative expenses and lower adjusted other income.
Looking ahead, the food company gave a wide range with its guidance. FY23 continuing operations sales growth of +4% to +6% is anticipated and adjusted EPS of $2.85 to $2.95 vs. $2.92 consensus. Adjusted EBIT is seen rising 1% to 5%.
CEO outlook: "With previous pricing actions fully reflected on shelf, and elasticities expected to be slightly above fiscal 2022 levels, the company expects sales growth in both divisions. The company expects improved supply chain execution and disciplined investment in its brands to drive further share recovery. Productivity improvements and cost savings initiatives will continue to play an important role in mitigating inflation, which is expected to remain elevated."
Shares of Campbell Soup ( CPB ) fell 2.44% in premarket trading to $49.15.
For further details see:
Campbell Soup slips after warning on elevated inflation pressure