Breaking Down Campbell Soup Company (CPB) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and looking for stable, well-established companies? Have you ever wondered if the food brands you grew up with could be a solid addition to your portfolio? Let's dive into Campbell Soup Company (CPB). Did you know that in fiscal year 2024, the company generated $9.6 billion in net sales? But how healthy is the company financially beyond just the top-line revenue? Is it a good time to consider investing, especially with long-term debt at $5.761 billion? Read on to find out!

Campbell Soup Company (CPB) Revenue Analysis

To understand the financial health of Campbell Soup Company (CPB), analyzing its revenue streams is essential. This involves examining the sources of revenue, how they have changed over time, and the relative importance of each segment.

Campbell Soup Company's revenue is primarily derived from the sale of food and beverage products across various categories and geographies. These include:

• Meals & Beverages: This segment includes soups, sauces, broths, and beverages.
• Snacks: This covers a range of snack foods, including crackers, cookies, and other baked goods.

For the fiscal year 2024, Campbell Soup Company reported net sales of approximately $9.1 billion. This figure reflects the company's overall performance across its diverse product portfolio and geographic markets.

Analyzing the year-over-year revenue growth rate provides insights into the company's ability to expand its sales. Recent trends show fluctuations influenced by consumer demand, market conditions, and strategic initiatives. For example, in Q3 2024, Campbell's net sales increased by 0.4% compared to the previous year, reaching $2.2 billion.

Here's a breakdown of how different business segments contributed to the overall revenue in fiscal year 2024:

The Meals & Beverages segment accounted for a significant portion of the revenue, driven by the continued popularity of core soup products and the expansion of its sauce and broth offerings. The Snacks segment also made a substantial contribution, benefiting from strong demand for its snack brands and innovation in product development.

To illustrate, here's a simplified representation of the revenue contribution by segment:

Significant changes in revenue streams can occur due to acquisitions, divestitures, or shifts in consumer preferences. For instance, Campbell Soup Company's strategic acquisitions in recent years have expanded its presence in the snacks market, contributing to the growth of that segment. Conversely, divestitures of certain underperforming businesses have streamlined the company's portfolio and refocused its efforts on core growth areas.

Investors can further explore Campbell Soup Company's financial health and strategic insights by visiting: Breaking Down Campbell Soup Company (CPB) Financial Health: Key Insights for Investors

Campbell Soup Company (CPB) Profitability Metrics

Analyzing Campbell Soup Company's (CPB) profitability involves examining several key financial metrics to understand its financial health and operational efficiency. Here’s a detailed breakdown:

Gross Profit Margin:

• The gross profit margin reflects the percentage of revenue that exceeds the cost of goods sold (COGS).
• Campbell Soup Company's latest twelve months gross profit margin is 31.1%.
• The gross profit margin for fiscal years ending August 2020 to 2024 averaged 32.2%.
• Historically, over the last 5 years, Campbell Soup Company's gross profit margin peaked in August 2020 at 34.6% and hit a 5-year low in July 2022 at 30.7%.
• In second-quarter fiscal year 2024, the gross profit margin was 31.6% compared to 30.5%. Adjusted gross profit margin increased by 70 basis points to 31.4%.

Operating Profit Margin:

• Operating profit margin illustrates the percentage of revenue left after deducting operating expenses.
• For fiscal year 2023, Campbell Soup Company's operating profit margin was 14.7%, compared to 13.9% in 2022.
• In the fourth quarter of fiscal year 2024, the operating margin for snacks increased 50 basis points to 14.5%, and the full-year margin improved 40 basis points to end the year at 14.8%.

Net Profit Margin:

• Net profit margin indicates the percentage of revenue remaining after all expenses, including taxes and interest, are deducted.
• Campbell's average net profit margin for 2024 was 6.89%, a 21.35% decline from 2023.
• Campbell's net profit margin for the quarter ending January 31, 2025, was 5.15%.
• For fiscal year 2023, the net profit margin was 9.8%, up from 8.6% in 2022.

Trends in Profitability Over Time:

Examining the trends in profitability metrics over time provides insights into the company's ability to maintain and grow its earnings.

• Gross profit margin has seen fluctuations, with a peak in 2020 and a low in 2022, but generally remains around the 31% to 34% range.
• Operating profit margin showed improvement in 2023, reflecting better operational efficiency.
• Net profit margin experienced a decline in 2024, indicating potential challenges in maintaining profitability across all financial activities.

Comparison of Profitability Ratios with Industry Averages:

Benchmarking Campbell Soup Company's profitability ratios against industry averages helps assess its competitive positioning.

• An industry comparative analysis shows competitive positioning with 14.5% higher operating margins compared to the sector median.
• Campbell Soup Company's EV/EBITDA NTM ratio is significantly lower than the median of its peer group, which is around 10.00, and lower than its sector average of 7.14.

Analysis of Operational Efficiency:

Operational efficiency includes cost management, gross margin trends, and other factors that impact profitability.

• Cost Management: Campbell Soup Company has been actively managing costs through various programs. Through the fourth quarter of fiscal 2024, the company delivered $950 million of total savings under its $1 billion multi-year cost savings program, including $60 million realized in fiscal 2024.
• Gross Margin Trends: The company's gross margin is influenced by supply chain productivity, net price realization, and cost-saving initiatives. In the second quarter of fiscal 2024, the adjusted gross profit margin increased by 70 basis points due to these factors.

The following table summarizes key profitability metrics for Campbell Soup Company:

Additionally, you can explore the Mission Statement, Vision, & Core Values of Campbell Soup Company (CPB).

Campbell Soup Company (CPB) Debt vs. Equity Structure

Understanding Campbell Soup Company's financial health involves analyzing its debt and equity structure. This reveals how the company funds its operations and growth. Let's examine the key components of Campbell Soup Company's debt profile.

As of the end of fiscal year 2024, Campbell Soup Company had a total debt of $4.79 billion. This includes both short-term and long-term obligations. Specifically, long-term debt was reported at $4.53 billion, while short-term debt and current portion of long-term debt amounted to $253 million.

The debt-to-equity ratio is a critical metric for evaluating a company's financial leverage. Campbell Soup Company's debt-to-equity ratio stands at approximately 153.8% as of the end of fiscal year 2024. This ratio indicates that Campbell Soup Company uses a significant amount of debt relative to equity to finance its assets. Here’s a breakdown of how this ratio is calculated:

• Total Liabilities: $8.24 billion
• Shareholder Equity: $5.36 billion
• Debt-to-Equity Ratio: $8.24 billion / $5.36 billion = 1.538 or 153.8%

To provide a clearer picture, here is a summary of Campbell Soup Company's debt and equity structure based on the 2024 fiscal year data:

In recent years, Campbell Soup Company has been actively managing its debt through various strategic initiatives. For instance, they have issued new debt to refinance existing obligations, taking advantage of favorable interest rates. Additionally, the company's credit ratings play a crucial role in determining its borrowing costs and financial flexibility. These ratings, provided by agencies like Standard & Poor's and Moody's, reflect the company's ability to meet its financial obligations.

Balancing debt and equity is a key aspect of Campbell Soup Company’s financial strategy. While debt can provide leverage and potentially increase returns, it also introduces financial risk. Equity, on the other hand, represents ownership and provides a stable funding base. Campbell Soup Company strategically manages this balance to optimize its capital structure and ensure long-term financial stability.

Learn more about the investors behind Campbell Soup Company: Exploring Campbell Soup Company (CPB) Investor Profile: Who’s Buying and Why?

Campbell Soup Company (CPB) Liquidity and Solvency

Liquidity is crucial for assessing a company's ability to meet its short-term obligations. For Campbell Soup Company (CPB), examining the current and quick ratios, working capital trends, and cash flow statements provides insights into its financial health. Here’s an overview:

Current and Quick Ratios:

These ratios measure Campbell Soup Company's (CPB) ability to cover its short-term liabilities with its short-term assets. As of the most recent data, understanding these ratios is vital for investors.

• The current ratio, calculated by dividing current assets by current liabilities, indicates whether a company has enough short-term assets to cover its short-term liabilities.
• The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity, showing the company's ability to meet its short-term liabilities with its most liquid assets.

A higher ratio generally indicates better liquidity. Monitoring these ratios over time helps identify trends in Campbell Soup Company's (CPB) liquidity position.

Analysis of Working Capital Trends:

Working capital, the difference between a company's current assets and current liabilities, is a key indicator of its operational liquidity. An increase in working capital suggests improved liquidity, while a decrease may signal potential challenges. Analyzing the components of working capital—such as accounts receivable, accounts payable, and inventory levels—can provide deeper insights into Campbell Soup Company's (CPB) efficiency in managing its short-term assets and liabilities.

Cash Flow Statements Overview:

Cash flow statements provide a comprehensive view of all cash inflows and outflows. Examining the trends in operating, investing, and financing activities can reveal important aspects of Campbell Soup Company's (CPB) financial strategy.

• Operating activities cash flow indicates the cash generated from the company's core business operations.
• Investing activities cash flow shows the cash used for investments in assets, such as property, plant, and equipment.
• Financing activities cash flow reflects the cash flow from debt, equity, and dividends.

Positive operating cash flow is generally a good sign, indicating that the company is generating enough cash from its business to cover its expenses and investments. Negative trends in any of these areas could raise concerns about Campbell Soup Company's (CPB) long-term financial stability.

Potential Liquidity Concerns or Strengths:

By analyzing the current and quick ratios, working capital trends, and cash flow statements, potential liquidity concerns or strengths can be identified. For instance, a declining current ratio coupled with negative operating cash flow might indicate liquidity issues. Conversely, a strong current ratio, increasing working capital, and positive operating cash flow suggest a solid liquidity position for Campbell Soup Company (CPB). Continuous monitoring of these metrics is essential for assessing and maintaining a clear understanding of the company's financial health.

Here is a brief overview of Campbell Soup Company's (CPB) cash flow data from the 2024 fiscal year:

In 2024, Campbell Soup Company (CPB) reported net cash from operating activities of $959 million, net cash used for investing activities of $186 million, and net cash used for financing activities of $744 million.

For more in-depth analysis, check out: Breaking Down Campbell Soup Company (CPB) Financial Health: Key Insights for Investors

Campbell Soup Company (CPB) Valuation Analysis

Determining whether Campbell Soup Company (CPB) is overvalued or undervalued requires analyzing several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios, and analyst consensus.

As of April 20, 2025, here's a look at these valuation aspects based on the latest available data:

Valuation Ratios:

Stock Price Trends:

• Over the past year, Campbell Soup Company's stock has experienced some volatility. As of July 2024, the stock showed a decline of 1.5% over the previous year.
• However, focusing on more recent trends can provide a clearer picture. For instance, looking at the past six months might reveal different patterns influenced by company-specific news or broader market conditions.

Dividend Yield and Payout Ratios:

Analyst Consensus:

• Analyst ratings provide a comprehensive view of market sentiment. As of November 2024, the consensus among analysts is 'Hold,' with a price target of $48.33.
• Ratings vary, with some analysts suggesting a 'Buy,' while others recommend a 'Sell' or 'Hold,' reflecting different perspectives on the company’s future performance.

Here's a summary table of the key valuation metrics:

Considering these factors, the valuation of Campbell Soup Company appears mixed. While some metrics suggest it may be undervalued, others indicate potential overvaluation. Investors should consider these aspects in conjunction with their own investment goals and risk tolerance.

Further insights into investor behavior and stock performance can be found here: Exploring Campbell Soup Company (CPB) Investor Profile: Who’s Buying and Why?

Campbell Soup Company (CPB) Risk Factors

Assessing Campbell Soup Company's (CPB) financial health requires a clear understanding of the various risk factors that could significantly impact its performance. These risks span internal operational challenges and external market dynamics, each carrying the potential to influence the company's financial stability and strategic objectives. By examining these factors, investors and stakeholders can better evaluate the company's resilience and long-term viability.

Here’s an overview of the key risks impacting Campbell Soup Company's financial health:

• Industry Competition: The food industry is highly competitive. Campbell Soup Company faces intense competition from other established food manufacturers, as well as private label brands.
• Regulatory Changes: Changes in regulations related to food safety, labeling requirements, and environmental standards can lead to increased compliance costs.
• Market Conditions: Economic downturns, shifts in consumer preferences, and changing dietary trends can all affect the demand for Campbell Soup Company’s products.

These risks can be further broken down into operational, financial, and strategic categories:

Operational Risks:

• Supply Chain Disruptions: Disruptions in the supply chain, whether due to natural disasters, geopolitical events, or other unforeseen circumstances, can impact production and distribution.
• Product Recalls: The risk of product recalls due to contamination or other safety concerns can lead to significant financial losses and reputational damage.
• Operational Inefficiencies: Inefficiencies in production processes, distribution networks, or inventory management can increase costs and reduce profitability.

Financial Risks:

• Debt Levels: High levels of debt can increase financial vulnerability, especially if the company's earnings decline.
• Interest Rate Fluctuations: Changes in interest rates can impact the cost of borrowing and affect profitability.
• Currency Exchange Rates: Fluctuations in currency exchange rates can impact the value of international sales and investments.

Strategic Risks:

• Changing Consumer Preferences: Shifts in consumer preferences towards healthier or more sustainable food options can impact demand for Campbell Soup Company’s traditional products.
• Innovation Challenges: Failure to innovate and introduce new products that meet changing consumer needs can lead to a decline in market share.
• Acquisition Integration: Risks associated with integrating acquired businesses, including cultural differences, operational challenges, and financial performance.

To mitigate these risks, Campbell Soup Company may implement various strategies, such as:

• Diversifying its product portfolio to reduce reliance on any single product category.
• Investing in research and development to innovate and introduce new products that meet changing consumer needs.
• Improving supply chain management to reduce the risk of disruptions.
• Implementing cost-cutting measures to improve profitability and financial flexibility.
• Strengthening its balance sheet by reducing debt levels and improving cash flow.

For additional insights into Campbell Soup Company's (CPB) financial health, you might find this resource helpful: Breaking Down Campbell Soup Company (CPB) Financial Health: Key Insights for Investors

Campbell Soup Company (CPB) Growth Opportunities

For investors eyeing Campbell Soup Company (CPB), understanding its future growth prospects is crucial. Several factors suggest potential avenues for expansion and increased profitability.

Key growth drivers for Campbell include product innovations, strategic market expansions, and potential acquisitions. The company's focus on adapting to changing consumer preferences, such as the increasing demand for healthier and convenient food options, is central to its innovation strategy.

Future revenue growth projections and earnings estimates are contingent on Campbell's ability to capitalize on these growth drivers. Analysts' estimates provide a roadmap for potential financial performance, reflecting expectations for revenue and earnings growth over the coming years. For example, revenue for fiscal year 2024 was reported at $9.4 billion.

Strategic initiatives and partnerships could significantly influence Campbell's growth trajectory. These collaborations can unlock new markets, enhance product offerings, and drive operational efficiencies. The company's competitive advantages, including its established brand reputation and extensive distribution network, position it favorably for sustained growth.

Here's a look at some of Campbell's strategic advantages:

• Brand Recognition: A portfolio of well-known and trusted brands provides a solid foundation.
• Distribution Network: An extensive network ensures products reach a wide consumer base.
• Innovation Pipeline: Continuous development of new products caters to evolving consumer tastes.

To get a clearer picture, here's a summary of Campbell Soup Company's financial performance in 2024, highlighting key figures:

These elements combined paint a picture of a company poised for potential growth, provided it navigates the competitive landscape effectively and continues to meet consumer demands. For more detailed insights into Campbell Soup Company's financial health, you can explore: Breaking Down Campbell Soup Company (CPB) Financial Health: Key Insights for Investors