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Campbell Soup Increases Annualized Savings Target; Updates 2018 Outlook

Campbell Soup Co. (CPB) said it has increased the annualized savings target from $450 million to $500 million by the end of fiscal 2020. It revised Fiscal 2018 guidance, based on the company's current outlook, including the impact of the Pacific Foods acquisition and the Tax Cuts and Jobs Act.

Denise Morrison, Campbell's President and Chief Executive Officer, said, "Looking ahead to the spring, we expect our beverage innovation plans to drive improved beverage performance in the second half. We are committed to returning this business to profitable growth. ...We have identified additional savings opportunities and are increasing our savings target to $500 million by the end of fiscal 2020."

In the second quarter of fiscal 2018, Campbell achieved $20 million in savings under its multi-year cost savings program, bringing total program-to-date savings to $365 million. It has increased the annualized savings target from $450 million to $500 million by the end of fiscal 2020.

Campbell has revised its fiscal 2018 guidance. sales are now expected to change by -1 to +1 percent, adjusted EBIT to decline by -7 to -5 percent, and adjusted earniungs per share to increase by +2 to +4 percent, or $3.10 to $3.17 per share. The guidance assumes the impact from currency translation will be nominal. Analysts polled by Thomson Reuters expect the company to report earnings of $2.97 per share for fiscal year 2018. Analysts' estimates typically exclude special items.

Campbell Soup said in November 2017 it expected adjusted earnings before interest and taxes or adjusted EBIT for fiscal 2018 to change by negative 4 to negative 2 percent, and adjusted earnings per share to change by negative 3 to negative 1 percent, or $2.95 to $3.02 per share. The company had affirmed its outlook for full-year sales to change by negative 2 percent to flat.

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