cpb-20230430

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended

Commission File Number

April 30, 2023

1-3822

CAMPBELL SOUP COMPANY


New Jersey			21-0419870
State of Incorporation			I.R.S. Employer Identification No.

1 Campbell Place

Camden, New Jersey 08103-1799

Principal Executive Offices

Telephone Number: (856) 342-4800

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Capital Stock, par value $.0375

CPB

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

There were 298,091,895 shares of capital stock outstanding as of June 1, 2023.

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION		3
	Item 1. Financial Statements	3
	Consolidated Statements of Earnings	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Equity	7
	Notes to Consolidated Financial Statements	8
















	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3. Quantitative and Qualitative Disclosure About Market Risk	34
	Item 4. Controls and Procedures	34
PART II - OTHER INFORMATION		34
	Item 1. Legal Proceedings	34

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
	Item 6. Exhibits	35
INDEX TO EXHIBITS		35
SIGNATURES		36

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CAMPBELL SOUP COMPANY

Consolidated Statements of Earnings

(unaudited)

(millions, except per share amounts)


	Three Months Ended				Nine Months Ended
	April 30, 2023		May 1, 2022		April 30, 2023		May 1, 2022
Net sales	$	2,229	$	2,130	$	7,289	$	6,575
Costs and expenses
Cost of products sold	1,561		1,465		5,028		4,519
Marketing and selling expenses	194		188		612		555
Administrative expenses	167		151		487		454
Research and development expenses	24		22		66		64
Other expenses / (income)	23		10		41		(10)
Restructuring charges	6		—		15		—
Total costs and expenses	1,975		1,836		6,249		5,582
Earnings before interest and taxes	254		294		1,040		993
Interest expense	47		51		139		144
Interest income	1		1		2		1
Earnings before taxes	208		244		903		850
Taxes on earnings	48		56		214		189


Net earnings	160		188		689		661
Less: Net earnings (loss) attributable to noncontrolling interests	—		—		—		—
Net earnings attributable to Campbell Soup Company	$	160	$	188	$	689	$	661
Per Share — Basic


Net earnings attributable to Campbell Soup Company	$	.54	$	.62	$	2.30	$	2.19
Weighted average shares outstanding — basic	299		301		299		302
Per Share — Assuming Dilution


Net earnings attributable to Campbell Soup Company	$	.53	$	.62	$	2.29	$	2.18
Weighted average shares outstanding — assuming dilution	301		302		301		303

See accompanying Notes to Consolidated Financial Statements.

CAMPBELL SOUP COMPANY

Consolidated Statements of Comprehensive Income

(unaudited)

(millions)


	Three Months Ended
	April 30, 2023						May 1, 2022
	Pre-tax amount		Tax benefit (expense)		After-tax amount		Pre-tax amount		Tax benefit (expense)		After-tax amount
Net earnings (loss)					$	160					$	188
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustments	$	(2)	$	—	(2)		$	(2)	$	—	(2)

Cash-flow hedges:
Unrealized gains (losses) arising during the period	2		(1)		1		9		(2)		7
Reclassification adjustment for losses (gains) included in net earnings	(2)		1		(1)		(4)		1		(3)
Pension and other postretirement benefits:

Reclassification of prior service credit included in net earnings	—		—		—		—		—		—

Other comprehensive income (loss)	$	(2)	$	—	(2)		$	3	$	(1)	2
Total comprehensive income (loss)					$	158					$	190
Total comprehensive income (loss) attributable to noncontrolling interests					—						—
Total comprehensive income (loss) attributable to Campbell Soup Company					$	158					$	190

	Nine Months Ended
	April 30, 2023						May 1, 2022
	Pre-tax amount		Tax benefit (expense)		After-tax amount		Pre-tax amount		Tax benefit (expense)		After-tax amount
Net earnings (loss)					$	689					$	661
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustments	$	(7)	$	—	(7)		$	(6)	$	—	(6)
Cash-flow hedges:
Unrealized gains (losses) arising during period	7		(2)		5		17		(4)		13
Reclassification adjustment for losses (gains) included in net earnings	(8)		2		(6)		(4)		1		(3)
Pension and other postretirement benefits:

Reclassification of prior service credit included in net earnings	—		—		—		(1)		—		(1)
Other comprehensive income (loss)	$	(8)	$	—	(8)		$	6	$	(3)	3
Total comprehensive income (loss)					$	681					$	664
Total comprehensive income (loss) attributable to noncontrolling interests					—						—
Total comprehensive income (loss) attributable to Campbell Soup Company					$	681					$	664

See accompanying Notes to Consolidated Financial Statements.

CAMPBELL SOUP COMPANY

Consolidated Balance Sheets

(unaudited)

(millions, except per share amounts)


	April 30, 2023		July 31, 2022
Current assets
Cash and cash equivalents	$	223	$	109
Accounts receivable, net	528		541
Inventories	1,280		1,246
Other current assets	73		67

Total current assets	2,104		1,963
Plant assets, net of depreciation	2,364		2,343
Goodwill	3,973		3,979
Other intangible assets, net of amortization	3,167		3,198
Other assets	465		409

Total assets	$	12,073	$	11,892
Current liabilities
Short-term borrowings	$	263	$	814
Payable to suppliers and others	1,353		1,334
Accrued liabilities	537		621
Dividends payable	113		114
Accrued income taxes	22		3

Total current liabilities	2,288		2,886
Long-term debt	4,496		3,996
Deferred taxes	1,072		1,074
Other liabilities	629		603

Total liabilities	8,485		8,559
Commitments and contingencies
Campbell Soup Company shareholders' equity
Preferred stock; authorized 40 shares; none issued	—		—
Capital stock, $.0375 par value; authorized 560 shares; issued 323 shares	12		12
Additional paid-in capital	407		415
Earnings retained in the business	4,392		4,040
Capital stock in treasury, at cost	(1,219)		(1,138)
Accumulated other comprehensive income (loss)	(6)		2
Total Campbell Soup Company shareholders' equity	3,586		3,331
Noncontrolling interests	2		2
Total equity	3,588		3,333
Total liabilities and equity	$	12,073	$	11,892

See accompanying Notes to Consolidated Financial Statements.

CAMPBELL SOUP COMPANY

Consolidated Statements of Cash Flows

(unaudited)

(millions)


	Nine Months Ended
	April 30, 2023		May 1, 2022
Cash flows from operating activities:
Net earnings	$	689	$	661
Adjustments to reconcile net earnings to operating cash flow

Restructuring charges	15		—
Stock-based compensation	48		46


Pension and postretirement benefit expense (income)	20		(31)
Depreciation and amortization	284		251
Deferred income taxes	(2)		39



Other	78		66
Changes in working capital
Accounts receivable	1		81
Inventories	(40)		(111)
Other current assets	(8)		(1)
Accounts payable and accrued liabilities	(123)		140


Other	(44)		(40)
Net cash provided by operating activities	918		1,101
Cash flows from investing activities:
Purchases of plant assets	(257)		(179)

Purchases of route businesses	(13)		(1)
Sales of route businesses	—		2


Other	1		10
Net cash used in investing activities	(269)		(168)
Cash flows from financing activities:
Short-term borrowings, including commercial paper	2,479		821
Short-term repayments, including commercial paper	(2,473)		(700)
Long-term borrowings	500		—
Long-term repayments	(566)		—

Dividends paid	(336)		(340)
Treasury stock purchases	(141)		(116)
Treasury stock issuances	22		1


Payments related to tax withholding for stock-based compensation	(19)		(18)

Payments related to extinguishment of debt	—		(453)

Other	(1)		—
Net cash used in financing activities	(535)		(805)
Effect of exchange rate changes on cash	—		(1)
Net change in cash and cash equivalents	114		127
Cash and cash equivalents — beginning of period	109		69

Cash and cash equivalents — end of period	$	223	$	196

See accompanying Notes to Consolidated Financial Statements.

CAMPBELL SOUP COMPANY

Consolidated Statements of Equity

(unaudited)

(millions, except per share amounts)


	Campbell Soup Company Shareholders’ Equity
	Capital Stock						Additional Paid-in Capital		Earnings Retained in the Business		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests
	Issued			In Treasury											Total Equity
	Shares	Amount		Shares	Amount
Balance at January 30, 2022	323	$	12	(21)	$	(1,039)	$	388	$	3,983	$	6	$	2	$	3,352
Net earnings (loss)									188				—		188

Other comprehensive income (loss)											2		—		2
Dividends ($.37 per share)									(112)						(112)
Treasury stock purchased				(2)	(51)										(51)
Treasury stock issued under management incentive and stock option plans				—	2		14		—						16
Balance at May 1, 2022	323	$	12	(23)	$	(1,088)	$	402	$	4,059	$	8	$	2	$	3,395

Balance at August 1, 2021	323	$	12	(21)	$	(1,021)	$	414	$	3,742	$	5	$	2	$	3,154
Net earnings (loss)									661				—		661

Other comprehensive income (loss)											3		—		3
Dividends ($1.11 per share)									(336)						(336)
Treasury stock purchased				(3)	(116)										(116)
Treasury stock issued under management incentive and stock option plans				1	49		(12)		(8)						29
Balance at May 1, 2022	323	$	12	(23)	$	(1,088)	$	402	$	4,059	$	8	$	2	$	3,395

Balance at January 29, 2023	323	$	12	(24)	$	(1,144)	$	391	$	4,344	$	(4)	$	2	$	3,601
Net earnings (loss)									160				—		160
Other comprehensive income (loss)											(2)		—		(2)
Dividends ($.37 per share)									(112)						(112)
Treasury stock purchased				(2)	(75)										(75)
Treasury stock issued under management incentive and stock option plans				1	—		16		—						16
Balance at April 30, 2023	323	$	12	(25)	$	(1,219)	$	407	$	4,392	$	(6)	$	2	$	3,588

Balance at July 31, 2022	323	$	12	(24)	$	(1,138)	$	415	$	4,040	$	2	$	2	$	3,333
Net earnings (loss)									689				—		689
Other comprehensive income (loss)											(8)		—		(8)
Dividends ($1.11 per share)									(337)						(337)
Treasury stock purchased				(3)	(141)										(141)
Treasury stock issued under management incentive and stock option plans				2	60		(8)		—						52
Balance at April 30, 2023	323	$	12	(25)	$	(1,219)	$	407	$	4,392	$	(6)	$	2	$	3,588

See accompanying Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements

(unaudited)

1. Basis of Presentation and Significant Accounting Policies

In this Form 10-Q, unless otherwise stated, the terms "we," "us," "our" and the "company" refer to Campbell Soup Company and its consolidated subsidiaries.

The financial statements reflect all adjustments which are, in our opinion, necessary for a fair statement of the results of operations, financial position and cash flows for the indicated periods. The accounting policies we used in preparing these financial statements are substantially consistent with those we applied in our Annual Report on Form 10-K for the year ended July 31, 2022.

The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year. Our fiscal year ends on the Sunday nearest July 31, which is July 30, 2023.

2. Recent Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

In September 2022, the Financial Accounting Standards Board (FASB) issued guidance that enhances the transparency of supplier finance programs by requiring disclosure of the key terms of these programs and a related rollforward of these obligations to understand the effect on working capital, liquidity and cash flows. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods in those fiscal years, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our disclosures.

3. Accumulated Other Comprehensive Income (Loss)

The components of Accumulated other comprehensive income (loss) consisted of the following:


(Millions)	Foreign Currency Translation Adjustments(1)		Cash-Flow Hedges(2)		Pension and Postretirement Benefit Plan Adjustments(3)		Total Accumulated Comprehensive Income (Loss)
Balance at August 1, 2021	$	6	$	(4)	$	3	$	5
Other comprehensive income (loss) before reclassifications	(6)		13		—		7
Losses (gains) reclassified from accumulated other comprehensive income (loss)	—		(3)		(1)		(4)
Net current-period other comprehensive income (loss)	(6)		10		(1)		3
Balance at May 1, 2022	$	—	$	6	$	2	$	8

Balance at July 31, 2022	$	—	$	—	$	2	$	2
Other comprehensive income (loss) before reclassifications	(7)		5		—		(2)
Losses (gains) reclassified from accumulated other comprehensive income (loss)	—		(6)		—		(6)
Net current-period other comprehensive income (loss)	(7)		(1)		—		(8)
Balance at April 30, 2023	$	(7)	$	(1)	$	2	$	(6)

_____________________________________

(1)Included no tax as of April 30, 2023, July 31, 2022, May 1, 2022 and August 1, 2021.

(2)Included no tax as of April 30, 2023 and July 31, 2022, tax expense of $2 million as of May 1, 2022, and a tax benefit of $1 million as of August 1, 2021.

(3)Included tax expense of $1 million as of April 30, 2023, July 31, 2022, May 1, 2022, and August 1, 2021.

Amounts related to noncontrolling interests were not material.

The amounts reclassified from Accumulated other comprehensive income (loss) consisted of the following:


	Three Months Ended				Nine Months Ended
(Millions)	April 30, 2023		May 1, 2022		April 30, 2023		May 1, 2022		Location of Loss (Gain) Recognized in Earnings







Losses (gains) on cash-flow hedges:
Commodity contracts	$	—	$	(3)	$	(3)	$	(6)	Cost of products sold
Foreign exchange forward contracts	(2)		(1)		(6)		1		Cost of products sold


Forward starting interest rate swaps	—		—		1		1		Interest expense
Total before tax	(2)		(4)		(8)		(4)
Tax expense (benefit)	1		1		2		1
Loss (gain), net of tax	$	(1)	$	(3)	$	(6)	$	(3)

Pension and postretirement benefit adjustments:
Prior service credit	$	—	$	—	$	—	$	(1)	Other expenses / (income)
Tax expense (benefit)	—		—		—		—
Loss (gain), net of tax	$	—	$	—	$	—	$	(1)

4. Goodwill and Intangible Assets

Goodwill

The following table shows the changes in the carrying amount of goodwill:


(Millions)	Meals & Beverages		Snacks		Total




Net balance at July 31, 2022	$	993	$	2,986	$	3,979




Foreign currency translation adjustment	(6)		—		(6)
Net balance at April 30, 2023	$	987	$	2,986	$	3,973

Intangible Assets

The following table summarizes balance sheet information for intangible assets, excluding goodwill:


	April 30, 2023						July 31, 2022
(Millions)	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Amortizable intangible assets
Customer relationships	$	830	$	(212)	$	618	$	830	$	(181)	$	649
Non-amortizable intangible assets
Snyder's of Hanover					$	620					$	620
Lance					350						350
Kettle Brand					318						318
Pace					292						292
Pacific Foods					280						280
Various other Snacks(1)					689