Campbell Soup Co (CPB) has reported a 61.89 percent plunge in profit for the quarter ended Jan. 29, 2017. The company has earned $101 million, or $0.33 a share in the quarter, compared with $265 million, or $0.85 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $281 million, or $0.91 a share compared with $271 million or $0.87 a share, a year ago.
Revenue during the quarter went down marginally by 1.36 percent to $2,171 million from $2,201 million in the previous year period. Gross margin for the quarter expanded 79 basis points over the previous year period to 38 percent. Total expenses were 90.56 percent of quarterly revenues, up from 81.19 percent for the same period last year. That has resulted in a contraction of 937 basis points in operating margin to 9.44 percent.
Operating income for the quarter was $205 million, compared with $414 million in the previous year period.
However, the adjusted operating income for the quarter stood at $417 million compared to $423 million in the prior year period. At the same time, adjusted operating margin contracted 1 basis points in the quarter to 19.21 percent from 19.22 percent in the last year period.
Denise Morrison, Campbell's president and chief executive officer, said, "I am not satisfied with our sales performance this quarter. Declines were most prominent in Campbell Fresh driven by a market share decline and weather-related issues in carrots, capacity constraints from the Bolthouse Farms Protein PLUS recall last June, and Garden Fresh Gourmet. Although V8 shelf-stable beverages declined, I am encouraged by the positive momentum in our core U.S. soup, simple meals and Pepperidge Farm snacks businesses. U.S. soup sales increased in the quarter, driven by our ready-to-serve varieties, such as Chunky and new Well Yes!, which performed above expectations.
For fiscal year 2017, Campbell Soup Co expects diluted earnings per share to be in the range of $3 to $3.09 on adjusted basis.
Operating cash flow declines
Campbell Soup Co has generated cash of $667 million from operating activities during the first half, down 11.54 percent or $87 million, when compared with the last year period.
The company has spent $132 million cash to meet investing activities during the first six months as against cash outgo of $139 million in the last year period.
The company has spent $518 million cash to carry out financing activities during the first six months as against cash outgo of $553 million in the last year period.
Cash and cash equivalents stood at $309 million as on Jan. 29, 2017, up 0.98 percent or $3 million from $306 million on Jan. 31, 2016.
Working capital remains negative
Working capital of Campbell Soup Co was negative $540 million on Jan. 29, 2017 compared with negative $434 million on Jan. 31, 2016. Current ratio was at 0.78 as on Jan. 29, 2017, down from 0.83 on Jan. 31, 2016.
Days sales outstanding went down to 17 days for the quarter compared with 33 days for the same period last year.
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