OREANDA-NEWS. February 18, 2016. Campbell Soup Company (NYSE:CPB) today announced that the company is raising its full-year earnings guidance for fiscal 2016, based on better-than-expected results for the second quarter.

Fiscal 2016 Guidance

For the full fiscal year, Campbell still expects the year-over-year change in net sales to be in the range of -1 to 0 percent. The company now expects adjusted Earnings Before Interest and Taxes (EBIT) to increase by 10 to 13 percent (previously 4 to 7 percent), and adjusted Earnings Per Share (EPS) to increase by 9 to 12 percent (previously 4 to 7 percent), or \\$2.88 to \\$2.96 per share. This guidance includes the impact of currency translation, which is now estimated to have a 2 percentage point negative impact (previously negative 3 percentage points), as well as the 1 percentage point positive impact of the Garden Fresh Gourmet acquisition.


(\\$ in millions, except per share)

Fiscal

2015
Results

Estimated
Currency
Translation
Impact

Garden
Fresh
Gourmet
Acquisition

Revised

2016
Guidance

Net Sales \\$8,082 -2 pts +1 pt -1 to 0%
Adjusted EBIT* \\$1,316 -2 pts +1 pt +10 to +13%
Adjusted EPS* \\$2.65

-2 pts
-\\$0.06

˗

+9 to +12%
\\$2.88 to \\$2.96

*Adjusted – see non-GAAP reconciliation.

The changes in guidance for adjusted EBIT and adjusted EPS are due primarily to Campbell’s improved gross margin performance and cost savings. The company’s three-year cost savings initiative is delivering better-than-expected results. As a result, Campbell is increasing its savings target from \\$250 million to \\$300 million, which it expects to achieve by the close of fiscal 2018. The company now expects \\$120 million to \\$140 million in incremental savings from these cost reduction initiatives in fiscal 2016, compared to its previous estimate of \\$80 million to \\$100 million.

Preliminary Second-Quarter Results

Campbell will report its results for the second fiscal quarter ended Jan. 31, 2016, on Thursday, Feb. 25. The company estimates that reported net sales for the second quarter will decline by approximately 1 percent reflecting the negative impact of currency translation, partly offset by the acquisition of Garden Fresh Gourmet. Organic net sales are expected to be comparable to the prior year. The company estimates that  second-quarter adjusted EBIT will increase by approximately 26 percent, due primarily to improved gross margin performance and cost savings. Adjusted EPS for the quarter is estimated at approximately \\$0.87 per share.

Three Months Ended

(\\$ in millions, except per share)

Jan. 31, 2016*

Feb. 1, 2015

% Change

Net Sales

As Reported (GAAP) \\$2,201 \\$2,234 (1)%
Organic -%

Earnings Before Interest and Taxes

As Reported (GAAP) \\$414 \\$337 23%
Adjusted \\$423 \\$337 26%

Diluted Earnings Per Share

As Reported (GAAP) \\$0.85 \\$0.71 20%
Adjusted \\$0.87 \\$0.71 23%

*Estimated Results