BofA Securities analyst Peter T. Galbo reiterated an Underperform rating on Campbell's Co. (NASDAQ:CPB), with a price target of $46.
The company's first-quarter net sales of $2.77 billion were slightly below estimates, with organic sales down 1% YoY, impacted by lower volume/mix and pricing.
Meals & Beverages net sales were lower than expected, with organic sales 1.5 points below, driven by lower volume and price. The Sovo Brand contribution was higher than expected, at $310 million.
Snacks net sales were slightly below estimate, with organic sales in-line, though divestiture impacts from Pop Secret were worse than expected. Adjusted gross margin of 31.4% was 40bps below estimate, mainly due to the Sovo Brand acquisition.
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Adjusted operating income of $432 million exceeded estimates by $3 million, largely due to lower marketing and selling costs, the analyst noted.
The company announced Mark Clouse, president and CEO, will retire in January 2025 to become president of the NFL's Washington Commanders. Mick Beekhuizen, currently president of Campbell's Meals & Beverages and former CFO, will succeed him.
Beekhuizen is familiar to the investment community and will take over Campbell's updated long-term growth plan from the September 2024 investor day, the analyst wrote.
CPB Price Action: Campbell shares are trading lower by 5.85% to $42.87 at last check Wednesday.
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