LONDON, UK / ACCESSWIRE / July 21, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Campbell Soup Co. (NYSE: CPB) ("Campbell"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=CPB. The Company, led by its President and Chief Executive Officer Denise Morrison, met with investors on July 19, 2017, to review and discuss Campbell's growth strategies and key initiatives. This annual investor meeting is focused on Campbell's strategic imperatives for diversifying its portfolio and adapting to consumers' changing preferences. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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Strategies to Unlock Campbell's Purpose, Potential, and Performance

Morrison announced that the Company has taken several bold steps to reposition itself for profitable and sustainable growth over the last five years. He affirmed that the Company continues to improve itself, its food, the business as well as the culture to differentiate itself and to create a long-lasting place in the lives of new generations of consumers. He highlighted four key strategies for driving growth:

  • Elevate Trust Through Real Food, Transparency and Sustainability - Campbell described that its real food philosophy is changing how it thinks and acts about its food. This is guiding the Company in restoring consumers' connection to food and supporting its goal of setting a standard for food transparency.

Campbell has established a scorecard called Campbell's Real Food Index to track progress in its ingredient commitments, such as its plans to eliminate artificial colors and flavors from its North American products by the end of 2018. The Company also announced that it would use only antibiotic-free chicken in its products, and this shift would be implemented over the next few years.

  • Continue to Diversify Campbell's Portfolio in Health and Well-being Space - The Company also deliberated expanding its offerings in the faster-growing health and well-being space with an emphasis on growth areas such as packaged fresh innovation and organic and clean label offerings in center store. Jeff Dunn, President of Campbell Fresh, defined his idea of driving growth in the division's core businesses in produce and deli with juices, dressings, soups, and salsa as well as expanding into new parts of the store.

Campbell is investing in its innovation process to produce new Campbell Fresh products with the speed and flexibility of a startup. The first product under this initiative Bolthouse Farms Plant Protein Milk is non-dairy milk. It is designed to tap into the alternative milks that have transformed the dairy category over the past few years. Bolthouse Farms Plant Protein Milk is made with 100% pea protein and is expected to launch in the dairy section of the grocery stores by mid-fiscal 2017.

  • Expanding Presence in Developing Markets - Luca Mignini, President of Global Biscuits and Snacks, announced Campbell's strategy for capturing a greater share of the growing snacks market by increasing its footprint in faster-growing channels and geographies, mostly in Asia. The Global Biscuits and Snacks division aims at boosting penetration of its iconic brands in their home markets, i.e. Goldfish in the US, Kjeldsens in China, and Tim Tam in Australia. Alongside, it also plans to expand into new geographies.

For instance, Campbell plans to increase the marketing efforts for its Kjeldsens brand in its key markets of Shanghai and Guangdong province while expanding its distribution in key regions in the East, and adding distributors in the South. The Company also intends to build its e-commerce capabilities in China to extend the Kjeldsens brand of butter cookies as well as to launch Tim Tam biscuits and Goldfish snack crackers.

  • Build digital and e-commerce capabilities - Given the increasing global inclination towards digital platforms, Campbell is also shifting its advertising spending to digital and mobile platforms. For instance, Campbell spent around 40% of its advertising budget on digital in fiscal 2016 compared to 19% in fiscal 2015.

Financial update

During the investors meeting, Anthony DiSilvestro, the Company's Senior Vice President and Chief Financial Officer, highlighted Campbell's progress on cost savings initiatives, key drivers for fiscal 2017, long-term growth targets as well as fiscal 2016 guidance:

  • Revised sales guidance for fiscal 2017- Campbell dropped its outlook for net sales while maintaining its previous guidance ranges for adjusted Earnings Before Interest and Taxes (EBIT) and adjusted Earnings Per Share (EPS). It expects net sales to decline by a range of -2% to -1% compared with the previous range of -1% to 0%. This could as a result of the recent recall of Bolthouse Farms' protein drinks and the related production outage, as well as the impact of a major carrot customer moving to a dual source arrangement.

However, the Company continues to expect adjusted EBIT to grow 11%-13% and adjusted EPS to grow 11%-13% or $2.93 to $3.00 per share.

  • Update on Cost Savings Initiative - Campbell expects its current cost savings initiatives to produce $300 million in annual savings by fiscal 2018. This cost savings goal is incremental to the Company's ongoing supply chain productivity program. The Company anticipates generating nearly $1.3 billion in cash flow from operations in fiscal 2016.

  • Drivers for fiscal 2017 - Campbell expects its adjusted gross margin percentage to increase marginally owing to its cost savings and productivity gains. Although inflation in core ingredient and packaging inputs has weakened, the Company is predicting a total cost of products sold (COPS) inflation of around 2%; this includes higher wage and benefit costs as well as the adverse impact of a stronger dollar on the input costs of its international businesses. It will continue to aim for supply chain productivity gains of 3% of COPS. Under its cost savings initiatives, Campbell aims to achieve incremental savings of nearly $50 million in fiscal 2017.

  • Long-term growth targets - Campbell restated its long-term targets for organic sales and earnings. It is targeting long-term organic sales growth of 1%-3%. The Company is aiming for adjusted EBIT growth of 4%-6% and adjusted EPS growth of 5%-7%, excluding currency translation.

Last Close Stock Review

At the close of trading session on Thursday, July 20, 2017, Campbell Soup's stock price declined 1.24% to end the day at $51.92. A total volume of 1.60 million shares was exchanged during the session. The Company's shares are trading at a PE ratio of 32.82 and have a dividend yield of 2.70%. At Thursday's closing price, the stock's net capitalization stands at $15.69 billion.

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