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Campbell Soup Lowers 2018 Earnings Guidance - Quick Facts

Campbell Soup Company (CPB) announced, based on the third-quarter results and outlook for the balance of the year, the company lowered its fiscal 2018 earnings guidance. Looking ahead, the company also will be reviewing all aspects of its strategic plans and portfolio composition. Campbell Soup plans to discuss the outcome of its review when the company reports fourth-quarter and full-year results in late August.

For 2018, before Snyder's-Lance, the company now anticipates: adjusted earnings per share to decline in a range of 3 to 1% (previously projected to rise 2 to 4%). Net sales growth is expected to be between flat to an increase of 1% (previously between down 1% to up 1%).

Third-quarter adjusted EPS increased 19 percent to $0.70 per share, reflecting a lower adjusted tax rate, partly offset by higher adjusted net interest expense. Gross margin decreased from 35.9 percent to 29.1 percent. Excluding items impacting comparability in the current year, adjusted gross margin decreased 3.9 percentage points to 32.0 percent. The company said the decrease in adjusted gross margin was primarily driven by cost inflation and higher supply chain costs, as well as the dilutive impact of recent acquisitions and higher promotional spending, partly offset by productivity improvements and the benefits from cost savings initiatives.

Third-quarter sales increased 15 percent to $2.125 billion driven by a 14-point benefit from the recent acquisitions of Snyder's-Lance and Pacific Foods and a 1-point favorable impact from currency translation. Organic sales were comparable to prior year.

Campbell's CFO Anthony DiSilvestro said, "While our organic sales in the quarter were stable in this difficult environment, our gross margin performance was below our expectations. In the third quarter, we made some progress against our key priorities. However, we are not satisfied with our financial results. Our performance has been impacted by both execution-related and external challenges. We are addressing these challenges with renewed urgency."

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