CAMDEN (dpa-AFX) - Campbell Soup Company (CPB) 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. Analysts polled by Thomson Reuters expect the company to report profit per share of $0.71. Analysts' estimates typically exclude special items.
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.
For the full fiscal year, Campbell still expects the year-over-year change in net sales to be in the range of a decline of 1 percent to flat. The company now expects adjusted EBIT to increase by 10 to 13 percent, compared to prior guidance for growth of 4 to 7 percent, and adjusted EPS to increase by 9 to 12 percent compared to prior guidance of 4 to 7 percent, or $2.88 to $2.96 per share.
The company said its three-year cost savings initiative is delivering better-than-expected results. As a result, Campbell increased 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.
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