Campbell Soup (CPB) 4 Dec 242025 Q1 Earnings call transcript

Good morning, and welcome to the Campbell's Company Q1 Fiscal 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to Rebecca Gardy, Chief Investor Relations Officer at Campbell's. Please go ahead.

Good morning, and welcome to the Campbell's Company First Quarter Fiscal '25 Earnings Conference Call. Chief Officer. Campbell's Gardy, Rebecca Investor Relations I'm And Officer; Officer. and today are Chief Executive Mark Clouse, Carrie joining me Anderson, Chief Financial remarks prerecorded. have Today's been to session. conclude live we the remarks, will Once prepared webcast transition Q&A we a have The prepared deck our to slide remarks, of Investor section thecampbellscompany.com. been press Relations and the website, posted earnings the release

XX Following the be session, transcript at same the Q&A the available by of of a replay conclusion a of hours. call within location the will the followed webcast

MULO+ will note, provide using as which and results for Mark into quarter Slide night. our our Circana in-market performance discuss X agenda. guidance data. we quarter outlines we then 'XX full and will quarter the of year fiscal insights well performance reaffirmed review end first the today's are fiscal financial forward, going by effective last 'XX, for our as in division. market Carrie Please the more first detail

we expectations. Slide actual and filings could which to list today, our be a statements, inaccurate Please will statements. are forward-looking rely call our or our presentation the that estimates, of could of for and in results to refer those statements cause our to assumptions materially risk. vary from forward-looking These factors On which make current X subject our SEC anticipated reflect on

most Because the GAAP comparable directly appendix we use these non-GAAP our measures, in presentation. we have measure provided of measures a reconciliation to of of the each

one to commitment it Mark, turn I to I unwavering Mark, your over time, and for personally wanted leadership Before you, last to extraordinary thank excellence.

Mark, that, with now . And

and I congratulate I'd team full XXth on lead have The and with X night's announcement Mick confidence and the over Board a CEO take want the retire last incoming in months. review of from address this our the CEO his to great we Before in I Campbell's to to results, company. my transition plans to XXX-year history. readiness to becoming Campbell's like next moment Beekhuizen

all back, team step for believe fully to built performance. better leadership As Campbell's are in I'm company's me I I could make This our the the future to going certain committed Campbell's experienced, for with strategy and forward. Campbell's the standard in They the to positioned prepare best in decision future. this the the transformed confidence enables and top company. be Together, we've that business. utmost the setting that of engaged trajectory our not highly and firmly has portfolio aligned, and food engaged the is bright. With team rooted

truly my have Since Commanders. Josh incredibly goal. particular, I in this a into has Leaving Campbell's very iconic played a and ownership growth. was of Washington once-in-a-lifetime to world sports important a been chapter of of for NFL the Commander's group boy, was of team is in part the moment the grateful an become franchise It easy a idea and choice. a I'm sports the not Washington working the opportunity of to President life, the Harris the to lifelong lead new and

in trust day also years. journey. last and these to the a through everything XX ownership Without most the be build is I'd industry. well forward what over was day X for and passion commitment and the and Campbell's entire professional organization. last in power as our question, great Commanders a team support in for special rewarding and incredible an privilege entire These my in experience been doing it of seeing an food look proved what as have Board team to like supporting caliber the source and championship incredible me I the X working nearly inspiration of out so investors honor and thank to to of years years made their Campbell's Directors their

to first Sovos Campbell's with began to reflecting quarter net to momentum fiscal 'XX up sales line our generally influenced and this the the that our with turn performance. retailer Organic due environment XX%, net inventory quarter expectations in the sales the year. added let's were down of with movements by in X%, results. We dynamic later continued timing top line reflecting first levels, Thanksgiving impact some a holiday Now consumer

We delivered of adjusted adjusted growth X% in an year-over-year EBIT $X.XX. EPS and

that flat, in-market difference the expectations Sovos, net consumption net Excluding later and explained brands Thanksgiving in with earlier end-market was meals by lower partner for and sales sales our Snacks. beverages organic holiday performance with I between mentioned the and line in

The plans holiday upcoming in critical consumption growth was the reflects share on to which serve second of expectation the as includes in strong and consumption guidance, quarter, delivering the which The positive both savings Importantly, while environment forma our Sovos commitments. an delivering dollar on We showed for our cost ahead basis, business. pragmatism. job our of quarter, our full integration navigating progress do season incorporates Sovos our productivity, level important pro steady excellent of reaffirmed team and 'XX the X%. an fiscal leadership remaining including and a an complex appropriate XX the brands year milestone dollar in-market will of progress in continues

will into Carrie fiscal We in guidance market QX line expect more the share top year. on second sequential momentum our with and half provide progression moment. details in a continuing of

experiencing briefly to are I we the X, of Slide expand benefit want the integration with upon material On Sovos.

organic brand specifically flat momentum the growth and net Beverages While and our sales adding mix, declined Meals year pro of from with important prior and the and company. from division prior expectation and the net have total company mix. volume would the Sovos, sales when been to to year with our QX positive including our The Rao’'s is and X% contribution flat forma exceeding volume Sovos the

across reflect recovery continue sector year throughout in with The volumes multiple continues we food with trends 'XX. and consumer continue fronts, anticipate ongoing to further to overall food seeing We're fiscal as starting improving favorable to confidence. improvement stabilization prices normalize,

continue this continues. an overall by as to consumer encouraged category pace, with to the progress. the every XX% be continue Although position And categories, growing in our not recovery advantaged portfolio is recovering same of be we at we in

we their As have most evolved brands, with our we our and and the brands in brands. Campbell's positions and Beverages the about #X X these these total transformed brands represented categories. at in almost Snacks. In segment our net way recently of leadership have Meals and We portfolio #X all held first XX X majority Investor advantage earnings, important we call the sales and Day, quarter, talk or enterprise discussed of respective in operating

consumption with grew X% In dollar positive Brands QX, by nearly Leadership share growth.

entrants certain to down from salty of continued new cookies. pockets label trade continue in and We some snack to categories experience pressure private in and competitive snacks

the strength we However, balance in and confident the of remain our the our year. plans leadership throughout brands of

Now closer division. respective look a at let's take each

timing holiday driven sales of in consumption the growth Moving evident with dollar to Thanksgiving the mix inventory Meals volume to and compared is sales year. the by net XXX prior difference and in-market growth. X% X%. later our were division were sales This by on to growth, Beverages higher this year, retailer movements impacted flat basis a Net X. organic the point Slide Organic of net in reflecting

Sovos and of grew by On the consumption X%, a growth addition volume Beverages increasing with pro fueled mix forma Meals dollar net Brands, X% with basis, and in-market sales X%.

modestly into average. with strengthened head broth trends dollar with share consumption ready-to-serve cooking is we portfolio XX, QX Page quarter by as consecutive of Soup of with driven segments, dollar the category as soup the ahead Campbell's in growth improving our expected, condensed increasing in to Turning or line third This and along season. our

label In challenges. the broth, in quarter half combination year recovering, service continued private fully of of and Private the and in label private is Swanson fiscal label we as modest benefit headwinds expect the category second the recovers. to usage share that increasing second from with increased

we households forward. months, brands to us we said going to consumers although As this of XX retain period excellent we our gives to next growth the expect the during more over have added in an opportunity those incremental previously, normalize share

and as segment to outpacing home consumers our fourth cooking share brands the quality at soups, continue condensed led growing cook consecutive for trust. grew by quarter, and Our label private they soup share red with white

marketing We We our we stabilization weather. in driven expect by performance Homestyle, strong improve of Well soup our saw And finally, delistment and the condensed the portfolio. across and led quarter. under Yes! in colder innovation, in-store execution by share to with ready-to-serve focus on also Rao's share eating ready-to-serve representing planned gained includes entire Chunky, point just a in portfolio. growth as the This headwind expected, of

distinct serve created portfolio Slide platform market a and platform. our delivered which in-market tiers, out Rao's sauce XX% Prego, of market positioning with growth. of continues brands the consumption to on price beautifully XX, remarkable diverse X% our this expand at billion-dollar segments momentum exceptional with pairs these combination robust stands an This by Rao's powerhouse across performance Italian to preferences. deliver and in a consumer The increase fulfill maintaining Looking we've and impressive to presence momentum consumer Prego

be sauce digits. our than now ability better XX% above maintaining Our in expect to in to the expected, guided across slightly segments we multiple continues brand versus the premium growth spaces. 'XX growth and capture mainstream to single pro both strong exemplifies while equity perform portfolio fiscal high previous Rao's forma and

long continue term, we the to range. growth at Rao's growth Over mid-single-digit in settle expect a to

a the both operational excites for headroom substantial portfolio. the team expansion. advancement is well is drives integration exceptionally strategic progressing as Additionally, distinctive most brands across and What us excellence

While XX% and Prego. category SKU dollar only maintaining in households Rao's as leads assortment as Italian reaching half many share, it of the Prego despite this the sauce achieves of just

than category's our pace. Rao's strong momentum long-term more traction about shows research demographics particularly millennial Our the younger household surging potential. This twice conviction adoption at remarkable with strengthens with

as about which premium segments will white further marinara, varieties household penetration. excited expanding promising offerings such Alfredo and accelerate even also are like more believe truffle into we We

continues takeout. broader far position to and source is levels. quality growth to Rao's fuel volume a mainstream between from strong addressable and market range Italian a Rao's area of and One allows comparison bigger that value the income incremental consumer This

growth progress Brands, sales. approximately strategy and despite resources and Partner potential key net Investor facing sales differentiated X XX. for decline Turning on We organic to planned the business strategic percentage deliberate concentrate Day. our areas greatest allows to point from our at Worth is efforts net noting sustainable on reflecting our in us our our impacted brands a X% Snacks that in leadership enhancement. This in several delivered by margin see reshaping we were reduction encouraging portfolio recent where Slide discussed organic

to competitive a segment on QX, environment and and held solid crackers, in in cookies. or beginning We our snacking several in deli Slide fresh bakery saw as expected. overall while navigating snack share with snack in more we salty areas segments performance shown As categories XX, the recover grew

important brand. back-to-school with with well. and enthusiastic teens Let me share this the in Crisps, extendability #X the Goldfish quarter consumers' working execution growing its of the $X continue continued start season, fourth like innovation and volume position momentum billion as platforms fuel both Bakery continued what's and validating held its momentum. during to to in-market both in from Pepperidge first quarter the response Goldfish Farm

including delivered gains. pumpkin seasonal And spice in Factory, our Snack pretzels, and growth share deli, in-market

We will Snyder's now sit Snack munchable and pretzel into expanding platforms. unique are Pop flavor unique Factory excited and alongside the with our Hanover ‘ums that Bites, incredibly big of about aisle additions

pressure In salty competitive stepped-up promotion putting and environment new on constructive. has snacks, remained some shares, although the entrants are

and fully QX defend appropriate that segments. core promotion in remain key have integrated some innovation, include and We to competitive in marketing plans increases in

first-ever remain private pressure full will label. These In line key have innovation, seen up our get of holiday people Pepperidge break Farm this on Homes and we've cookies especially display Santa into would And you pricing with holiday Milano's the disciplined we of support launch these ready the the returns while head cookies to Snyder's and jars, Fancy season. from Chocolate Pretzel Gingerbread to as our past give areas pretzels, holiday season. and collectible build holiday and cookie help is weeks, on ramping more log advertising a experienced White

through is to the consumer balance expect summary, make we fiscal category of although an to same trends our improving continue progress, recovering not environment the 'XX. pace, every recovery at continue and In category

with Our were performance our quarter expectations, by propelled continued and generally Brands first execution. aligned strong leadership best-in-class Sovos acquisition, results brand the

the our toward our for year demonstrate We and are in QX expect we delivering guidance. improvement holiday as to ensuring we that maintain season QX are well fiscal full pace positioned 'XX sequential key

continue it acquisition fiscal in the Sovos in we progress strength adjusted and behind And expect the 'XX. of with significant confidence portfolio the Rao's execution, with made as accretive to the Overall, continues Brands environment to the the brand, remain We've positioned be to navigate team, integration. to we our now to well continued EPS improve.

to With me turn let Carrie. it that, over

Mark, Thanks, and morning, good everyone.

line Sovos overperformance our line in expectations results and with in expectations. from with earnings quarter with performance Brands an first Our generally were

were divestitures sales, contribution influenced reflecting Thanksgiving Reported sales year. to decreased impact the continued XX%, net Sovos. the and of strong later in due this the up net movements levels, excluding and currency X%, environment driven dynamic consumer sales from holiday Organic by the a timing some by of acquisitions, the retailer inventory impact

X%, expectations. reflecting exceed the acquisition, of approximately adjusted EPS to our quarter, to while The grew the contribution adjusted levels to to decreased higher from in EPS due EBIT continued Adjusted debt. from neutral expense the $X.XX higher strong was impact interest stemming of the acquisition X% which

Turning to Slide XX.

offset X%. by quarter this were earlier, unfavorable down driven As flat X%, price mix, volume net by mentioned organic the of and anticipated sales was for net first

reported growth. to sales points percentage net XX added Brands Sovos

profit On impact acquisition. basis from XX basis margin Slide quarter gross driven a adjusted point declined the points, XX, primarily XX first by

our points and Excluding XX and largely savings productivity gross unfavorable was improvements net the offsetting planned realization. supply adjusted modest margin initiatives, price other cost acquisition, business a base down chain inflation cost with and basis

planned the program, which impact approximately of full $XXX than expect to first savings. quarter, inflation be Sovos million our low of and million single-digit savings $X to savings sufficient of more core delivered we under the year, cost productivity the new the savings full approximately the For offset for In integration we cost was million $XX year. initiatives

and year, Marketing the spend total increased integration admin Sovos Turning and reflecting in dollar of prior to Slide the expenses from Brands. XX. selling expenses

However, the promotion both a of and marketing sales. and consumer as selling remained XX%, net expenses, acquisition. by Within areas flat of primarily driven expense rose advertising the percentage expenses impact by

the again, Adjusted costs administrative initiatives. by administrative expenses of by and the savings cost impact benefits partially acquisition offset inflation, driven from higher X% the as general as increased well

and to adjusted adjusted increased primarily and R&D adjusted quarter expenses. shown increase and administrative X% first As on selling gross an Slide in EBIT partially marketing by XX, profit, due adjusted offset expenses

On Slide by more our the outstanding than acquisition primarily to growth $X.XX, the bonds. billion refinancing of higher XX, to $X.XX lower was adjusted EPS related modestly moved EBIT as interest expense and of offset

approximately to adjusted As acquisition in mentioned earlier, neutral the was was EPS the quarter.

net division QX for Sovos XX. Sovos Meals approximately had XX% first growth sales of Slide if would forma for Beverages X% the quarter driven we respective QX increased XX%. to net 'XX, Turning and by the contribution been of to reported the due the sales acquisition. as Pro of pro fiscal owned have forma QX of all growth

year, in pasta Organic of driven to Positive and offset decline declines. in-market price prior net positive flat X% and was timing-driven Thanksgiving Canada unfavorable was Prego soup were sales offset volume compared U.S. later by by a gains sauces, to net inventory realization. U.S. X% foodservice, in consumption mix by

Soup the Thanksgiving the the retailer organic from with net driven later in inventory of sales difference holiday part year. impact this on

of QX marketing to decreased and the Meals from by of expenses impact to base the XX%, benefit business. the in Additionally, operating the increased acquisition and Beverages and due margin as acquisition points selling first division XX driven quarter basis earnings in operating the primarily XX.X%, expected. the lower

acquisition, operating the margin Excluding year-over-year. improved

approximate quarter other chain sales net XXX were were volume First earnings inflation declines X%. costs and Goldfish productivity. Snacks from supply X%, Pepperidge offset July declines X%, by XX% to quarter lower of profit and decreased gross sales and price and the of realization partner of contract partner and impact lower organic basis partially lower snacks. supply snacks reflecting due as chain driven brand an the Late price declined in contract and operating realization and by in headwind Sales Farm in net mix Cookies, point by impacted lower Crackers brands,

by Snacks QX percent sales. This higher points operating a margin XX.X%. and basis for was XXX selling marketing to and gross decreased driven lower of as margin profit net expenses

net savings, We of a to favorable prior core neutral leadership mix second expect and year, and with contribution compared margin supply of in more productivity reflecting higher growth brands performance net impact benefit the and stronger stronger a chain cost half year, inflation trends, operating of half earnings second other costs. from volume improving the and price the

million the flow XX% increase XX. generated in Slide cash a the $XXX prior to Turning first in from year. operating We quarter,

We $XXX productivity incremental to capabilities the business prioritize of continue enhanced into capital million. drive with growth, to business back reinvestment expenditures and QX

We remain also committed dividends returning to shareholders to our million paid share cash million the quarter. with and of $XX $XXX in anti-dilutive repurchases in

on in dividends X% confidence XXXX, a long-term increase for also reflecting payable potential. growth quarterly XX, dividend in flow We earnings, announced regular our cash January and our

reflecting Sovos the 'XX. our EBITDA leverage to quarter our end adjusted to investment-grade in ratio with We X.Xx, of the in ratio return of to at first the is committed the line and leverage the ratings Xx goal financing debt fiscal our net remain was Our net to and of at acquisition end fiscal target 'XX.

million quarter, under issuance of first October existing end bonds facility. the company On refinance the approximately available X, the debt. our billion credit of approximately At we had in in revolving and cash and the $X.XX equivalents billion cash $XXX to $X.XX completed

our conservative consumer assumes a navigate reflect a the The range Based the earnings QX company current our end expected quarter as Accordingly, performance, are end landscape, balance pragmatism quicker reaffirming upper while the of sequential environment. progress ranges provided the continues between of on and slower, we 'XX year fourth our on of the fiscal guidance to of recovery. anticipates lower the a call. pace guidance full normalization more range

we and million, First, to in support less pursuant balance be with of our to this of the Savings a have range up for the opportunities include for dynamic investment have expectation price to to a and crucial new $XX fiscal support in To meet robust fiscal industry, are for prior we in These cost like year up the $XX than XXX 'XX points 'XX now this an million to QX To period. continue this pipeline from to acceleration need, performance holiday step continue expected a near-term of investment. and environment. other savings food savings As net million. full program. Mark operate consumer $XXX following: mentioned, in the challenge, fiscal planned we opportunities 'XX basis companies our of X-year macroeconomic in

a $XXX driven of million, that million adjusted in net the refinance our Second, full debt on expected prior the primarily year from expense now year. guidance issued be billion is coupons fiscal debt $XXX this million by the lower to of approximately $X.XX to improvement interest range to matures later $XX

Collectively, third, was growth from better The forma earlier, to increase to mentioned than be to competitive now adjusted creating of this also while the anticipated. expectation specifically to provide high range to and half expected brands as X accretive these guidance our while the navigating be year. necessary full and the continue And our for second Sovos stay is behind single-digit growth. now is areas acquisition Accordingly, above environment. invest in pro EPS Rao's, to brands, fiscal XX%, 'XX fiscal confidence earlier Sovos' an dynamic continues perform maintain expected slightly to for our room

beyond important sales meeting lower will The quarter, an the the our recovery and guidance be EPS prolonged expectations. the indicator Should likely. of more in second adjusted company's become the end be would consumer quarter progress second of

selling support the net marketing mix. positive improvement a and volume up sequential and relatively to low as is organic be both versus a prior sales the expected EPS maintain to growth of year and sales to in innovation net from Adjusted in net with levels step with $X.XX and sequential to QX, and range, for holiday we to flat Specifically quarter first price be in competitiveness. investment percent expect see launches the expenses reflecting

as sales March expect half fiscal 'XX at business, of the Looking cycle fiscal expected and of organic modestly a by on competitor's trends our offset second reflecting growth outsized half broth moving organic improving we supply the related second as we XX, portfolio base of lower from to improve of growth the Sovos first into the net in to partially issue. contribution XXXX Brands half, 'XX, of the growth

year, savings, we from integration cost announced the QX. and a savings of second productivity marketing divestiture the neutral net addition, to benefit in the expect the benefit higher lower to half November In EPS a reflecting of adjusted of the headwind progress interest compared fiscal 'XX, prior continue net price more in expense of Sovos, planned year-over-year expense a $X.XX on and noosa. we including Recall, XXrd XX, from from and impact week

full year the earnings Our in is the next not does pending of yet first of the close transaction. impact XXXX. call closing guidance We'll our 'XX our the the plan quarter which guidance expected update divestiture, scheduled year to following of calendar to reflect fiscal regularly on

sales share assumptions unchanged. October the XX is trailing All transaction noosa's months $X.XX per of to be earnings underlying to the and fiscal expected remain $XXX of in approximately through dilutive 'XX. by guidance other net end was million,

consumers we from wrap progress which to generation expectations savings our with and We results To up, QX continuing discipline to our cost strong our shareholders. reward our were consistent while was performance, pleased focused with with initiatives with our line making productivity capital on on and value partnership delivering in remain cash customers, Sovos generally and our Brands.

a building guidance continue out that measured, we brands position a balanced more pipeline approach long us our term. for by a For year, our enable are taking to the environment the full additional to are savings competitive and reaffirming to of

remarks. our concludes That prepared

and Mark as the I CEO. Before new and working look to over to the Mick capacity operator, Campbell's turning forward call opportunity, his with I on new congratulate to want his future

open the call for let's Q&A. Operator,

JPMorgan. Our come Ken Goldman Instructions] from first [Operator will question from

going CEOs incredibly a you. the congratulations you to this. It's where one hearty day every of to see exciting hear NFL. to Doesn't Mark, about our happen

happy you. So I'm and it's unique, for

gross below consensus ask bit and a came marketing. to the wanted They both about expectations. in margin I little

quarter? what know drivers of helpful a own expectations, for, But breakdown you in those usual. quarter EBIT broadly versus line marketing the just versus about blocks your provided with I perform kind you you the But how we were margin as said. did of margin, gross into coming building You the think the anticipated gross came margin the what looking as they of and

bit a But to you it's I think blocks. color some of question, of have Carrie then give primary on building couple little the insight a good Yes, to a differences. it. Ken. And I'll try add

what So expected cost do what if very expected. to do, we those to about to productivity you and savings all much we think what with do, expected we line pricing of were in

no So really across surprises board. the

think of I perhaps a the piece difference business. was that bit the little the was mix

as a, and a shift you had beverages. very A and really we have Sovos. business very, later would of seen reflective and of So inventory strong the little occurred the performance Rao's timing out of meals organic softer primarily Thanksgiving that in bit

favorable those and think very swing. came you of was mix out, little If little to biggest the driver disconnect bit as And through but mix. what mentioned, generally although maybe materiality was that those I say coming neutral. impact a not the we combination. were pressure what the if Carrie of mean that between take you you would from seen in major are, a down a a categories neutral, bit more in, expected our But essentially have would of about are probably slightly standpoint, what I Sovos

add that? to Carrie, to anything

margin Rao's, which higher lower would a of margin a our business, which you lower. just came And then and in that about that is higher profile, at Sovos gross think you on I has little margin, a had that Yes. is elaborate profile. as mix legacy

mix that issue So there. a created

a the thing in the beat that think line, on expense the bottom good came bit terms better. other little In of interest thing. And I a in that's addition,

we've that's later interest due year. been debt We our think proactively I coming managing accelerated expense. refinancing this a of

that we the continue accretive was that helpful move of full year. to for all Sovos So nature to as

maybe the the if and the way in of got conversation marketing bridge phasing all obviously, And this have that if of because we're just addition the morning, we on the business, -- this the were base selling walk up seeing into the to evening for some Rao's, you in on but down. finish and I that we've essentially over of quarter, organic that Yes. we know the would business. to seen year, flat

to talked And we about, up. do as we expect had step that

much see in because more innovation obviously, where QX I significantly our think of you'll a that's lot where holidays are, the that also is. but that's

that I see solid out a for think expectations although for may disconnect, have more a of you in little should as bit position a But think investment been were of to in there. we very QX we laid obviously So I investment a kind step-up expect little on QX. of a bit

Okay. by already my And in before overly my been follow-up, messaged was saying X I effusive praise. people I've

offset fly I'll a I So in the... But eagle throw guess to fly that.

Is the That's right Ken. learn. one one, the new need that to you

I don't acknowledge that.

be jump anything [indiscernible] way is I we back not XH be tailwinds remains, year? model than there glance. Campbell, half that the benefits, at I timing a company of should we to the guess, with, unusual bit the So might observers higher, to to of as of obvious first considering investors the Is just some comfortable Just back it. guess, the be terms things right to say may in the

there Yes, I think are.

-- Carrie, we pathway? the, what little the describe as the of walk would so don't you why through bit a And

Yes.

offset outsized that last about partially related expect to think you broth competitor supply by year improving as we half, growth issue. organic from As second business, trends, improve modestly the sales second half about expect lower do we from March. we half, sorry, think outsized for we do in And moving the a to expected the -- the organic growth into as underlying net growth reflecting that first then Sovos

again, half significant overall, that's second improvement, in So as modest organic nothing the we trends. think growth about

this first in interest half would second margin We headwind cost as the would expect the progress, is prior think to net lower second there nature We where to higher of the moving from savings half. expense. from of in about half versus a integration is that impact about reflecting year. into second more out. And neutral net accretive marketing think includes I savings and some productivity we a progress half, and the have P&L, benefit compared Sovos we As price the talk call the and items EPS

last the So to we'll lap mid-March acquisition that from that was start year.

was will headwind half. that so be a And it than first lower in the

in to the thing week then benefit is XXrd And have the QX. other that remember we

$X.XX timing fourth So in us quarter, a That's there. benefit right? fourth that's in in unique quarter of we'll terms QX the that other be our to in companies

So around savings I interest the accelerated. favorable in things, those doing -- are being areas about I that think cost was coming as better expense think the

really our overall So out-of-the-gate then on performance and seeing savings strong some Sovos. cost

think of good also leave would just And dividend did And the we I our thing about our confidence with increase again, that and fact that, as well. in all to flow. I continue our cash the last the is fact to on end want we that, have as earnings

which think, Yes, a the business. of confidence backstop in good, is I

I bit confidence in an successful us even do being that as would just in add will Carrie interest. about lower a is only overall -- in of thing variable and a cost the said a end think little is we're this of I a That managing up our more from debt, And important execution better-than-expected performing the you from think Rao's what of X the when the agenda bit little I seeing strength of that is months see contribution needing and giving a help more earlier, investment. as light which year. savings

where year. less year, we XXX And I talk guidance. the sure that, in drivers I'm and when started still support not material Again, say year adding we we little for points important we're from full the gave when than managing basis something difference a about full expecting is make a think bit I of but when we to just think, folks' we're the we QX, QX, to expectations think for when understand more really were -- the price,

helps a So back bit half in that bridging hopefully, little that expectation.

question Lazar comes Our next Barclays. from from Andrew

Let a the X% me XQ, also well, versus of a the Organic in congratulations came you to prior year-over-year add expect year of you you flattish in Campbell's quarter calendar modest I kind in year in a fiscal my now expect sales as continue back to where for expectations expectations organic results of down would And sort 'XX to around to Maybe to increase. Mark, of sort recently the of when another their sales year, guess for reporters improve. result. following of on which Mick. sort fiscal with half food Street of back seen And next just half. flat for space was question looking for and we've the below-algorithm discussed sort many congratulations your kind minute correlate a the calendar

going how much get some you you So went into some the that I'm know of to many where I X the already be like players next account industry taking sense are right, square drivers kind But I'm lot I of around I kind to not through just factors, those like now things, are those guess but just half. "Hey, back is want not guess. be". to of a of of trying to mean of year a trying cause, saying, of kind it I we

that if it's kind landing a Right, stick, of anticipating right. expectations things And will. if important is of we're the not as I that's you comprehensive hockey in one think

backstop the that you and some organic top to a think starting the headwinds what cycling. our gives the back organic a And the as consumers do of different help to to behaving than way then see look that, overlay we're add about I step-up of going and fact that ago, you little already experience a first were I'm differently. half think as both when in we the a look I half numbers. on at year are tougher if of bit at half our into Rao's little And bit a confidence go we I I thinking I started back we from back think

our level along already in on strong platform investment very that's a and a very robust top baseline got innovation program You've with it. of of

to So from of were very as always where don't first was have -- said half. a transitory although in the the I back period, we fiscal on-algorithm step which how consistent that expected. perspective necessarily it we have we up year half is with expect and we a what more 'XX did an we well with Again, disagree all be not inclusive feel, of of 'XX albeit as

a the of navigating think, think I see job, done we think where want I to we did. a different to QX quarter. I nice first again, We've And variables variety -- land as

transparent, expectations a impacting back and will got which see very we've what robust the want confidence think and And driving completely give to QX. I that in share the greater plan we I to I be like. think have, looks us half

look again, we and cycling, what you today, we're as improvement give in what view see always to to that's are modest we half. back we how for can a as good get what real-time like see feel But And we you of the position kind that count to on us we at is going. do a of

that full where say, really right, the the of That's beyond that take were? in and it Got a Or a it. and of couple fall get such, XQ. year year increase, sort of most with it a end there. marketing at to then where ago, investment that. prepandemic that does you would in of in of line years of just perspective sort helpful. this put you modest promotional still sense you trying and Where of versus, to seems let's And like that? Would promotional with all context were be Just relatively you from

feel in none good like mean, been again, a from the would of where of would But we are a given with very to say, say that's surprise I nature historically. question. and line feel it's anyone. the I competitive I landscape, have I Yes, standpoint, promotional that we big, like a I much

that a will with type in any a pretzels. the categories I think I especially need think consistent that's disproportionate do I and cookies believe I reduction where not we got through of at of the on we and remain need We levels fact fights price. to know win intend that day, those the end the to marketing promotion, equity not do lose of the we to we've by disciplined driven nor points, important, level sight right? have is that but see price innovation, in we've we cycled appropriate like been to do of before. balance

plan And so that we the that's have.

the to a the is the shares that of see see I again, us is weeks quarter. beginning if X latest those for categories programming, we're time to into look QX I next stabilize. we and into beginning And news But indicator early cookies, a on the really starting at of where And of good both the our especially lot holiday go frame. good on as

we're experiencing new I think right, salty amount even whether In it's from pressure. some also very kettle, in entrants. those to the all of actually we're the salty where areas doing salty, coming it's of fighting is or it's competitive entrants, really, that a whether there are These subsegments chips, universe. pretzels particular what fair cases, other new well relative tort or are broader

so And competition. little a we've more got

So it's again, not bringing promotional and innovation fight price, news being think the the a that along ensuring calendar. is about there, on appropriate really -- we're I competitive waged with

snacks, I unsustainable as pressure, pushing at look or of we're So the promotion. into us experiencing where competitive that's levels don't of see I anything unreasonable more

Peter from America. Our next question comes from Galbo of Bank

to Chunky Congrats the next forward look commercials And I Daniel's we'll guess, in Mick. Campbell's to Mark, year. Mark being and to Jan

Peter. universes, X separate

more, timing later? Thanksgiving quarter if can getting just to kind that this the a quantify one you much And with how morning question given can kind maybe Mark, related just all at maybe that think of inventory unpack kind your an shift of A, moved? around just Thanksgiving. end October of you bit nuance we're you just it

Yes.

and quarter, those. look a find about about and X-point the just would you between did a net profile in-market I if X-point the delta that the foodservice, and -- at beverage from is see it Canada way a sales. think So we tell you'll meals you to roughly for easiest in consumption the the

through pressure so majority in inventory. difference of the that And that really, is of coming some

have swing. do I retailers in related inventory in on week would Thanksgiving focused think half week more later later very of think than had been that of certainly of the it's do I say Now or have managing and But impact, I -- an general. fair down to been that levels general to that say the would

picture And saw the in of the November. month again, of the we of into is, as I think of would But news November, inventory kind a that month later some and earlier full Thanksgiving. which Still of quarter early pivot to too certainly, bit give the little a moved have second. we first been of build into good out the

Got it.

restaurant some mentioned, suggests back just you're case No, that specifically Rao's you the share of looking from at And just source you actually for curious I in Italian the that. channel? seeing occasions internally kind or the and I'm of Okay. what you to of the that's if sourcing that had what thanks are the that Rao's kind on slide go some concepts of you're data that seeing

Yes.

couple of of a things -- one think I the that.

from broadly I XX%, in speaking, into you're meal is year home up dynamic, up ago. you're for from seeing XXs. would a still from versus still more broader seeing First, consumer say the which a occasions. low away migration home We're still

continues. And migration so that

households. is amount this in middle is and lower experiencing growth income fair middle so what from think we're we're seeing I of a coming encouraging that Rao's

with as consumers, Prego that buying are explore well. we as consumers appeal, And the and are remember, these also

acquisition levels. is seeing that may something power we coming. worth continue income really idea Rao's different or in a you forth. value it a order think point. makes occasions focus I different DoorDash And new And the this team of that. compete we've context, business, from that Prego I is online And focuses trying occasion. to on areas the want that understand multiple seen you uncovered able that in point Rao's level price Rao's to on you're from difference the understand that is think to focus And becomes much us to get well routes lot for as and of campaign quality being of of that as of takeout very the significant seen Italian before the consistently on a and of on one focused with what to tracks put really would this And Rao's And that. right in the as you compelling and think segment how our really to the again, business we to very talk so would we're advertising versus so in going what And Rao's been so growth to you in it has even I have and want well hear actually where across income more try business that's continue about to and kind really have the when our

from Moskow next Robert Cowen. comes question Our from TD

established hit like you Can thought. margin XX longer have still think was think we're just that a expansion. value year? I expected expectation be pressure maybe quarter. needs too. would what all forward. And there higher correction wishes. of inflation during Mark, than And lower high and think too a that under I term, margin what have a and And target I just kind I were supply for value concerned margins on that's your The being snacks in the environment -- had to wanted the That's you. for little congratulations Campbell to bit I what seem took basis that there's equation expected. salty chain quite prices know, correction cost One for point XX.X% you And question the going a Snacks. bit around category I Best to than to this pandemic some this with pricing

does XX% how the that longer margin goal So term? inform

Yes, great question, Rob.

bit about let a the little kind flip So batting me and I of longer-term could, the talk order if I'll objectives.

different that improvement very first number, the to remain optimization as would down intact. from we've put market, that mix the to variety in I areas work continue brands think and relates the we thing cost savings of a to partner map it to road in as much all place is say route I network

recognizing a leadership, nice to continuing not pressure satisfied we I job in the to marketplace Chris' And that has the that under would continue of that we and the team today. do Foley's in buffer to are ensure is how can a be anything, bit very identify say of utilized if done leadership, savings a to be got manage that that landscape, competitive we've a Chris

I would it is that a did need to too price too, of tell to reset". broader much or you question, "Hey going snacks be on

period is past were the without the might the -- the I back bit might of perhaps and it level lot amount that promotional even way why little significant of that a arguably a feel think we difference in a elasticity. period walk to during COVID able

think fact. that's I a And

I if But moved wonderfully is years reality ago, fashion, a and and I remember this it's in is you now I received. we've cycled as several very past years that, wasn't and played which similar segment. the is, this said think think very it several out a competitive

of component that a having important so of snacks display drives the remains And promotion a level category. very

that's I value think play, the we good primarily news recalibration for or segments. a place and added having anticipate elevated And significant in where value. Campbell's is where we are do not

before, said pressure the some pretzel base I very label As to do and watching that's of think private be to our base mindful and there. got I relates we've in price business it our cookie as

structural of material purchase or change to be But change don't to critical we a promote drive what like continue I end I backwards. appropriately plan that to we're and impulse to to need snacking. think feel is going the at But the so do day,

a maybe, be the can little that Carrie, As think about bit as... this we because I of there'll discussion you get to year cover bit a and term, near talk little

that, Yes, the believe going with improvement there half, our think the to in half would that's applied second a are division well. as had are In for Snacks I is earlier to but certainly reasons applicable outlined improving answered volume versus be expectation it's margin Snacks half. it division also first to enterprise, the the And what help trends for I year-over-year total snacks. the second

lower DSD optimization. with snacks we've and of our that well the brands of got initiatives. manufacturing impact contract mix marketing and going in to business, and restructuring ongoing and partner savings improving route have a step-up and in have a we've price Pop plant, the divestiture half some our cost net secret announced the and our and leadership brand to more neutral higher lower that mix You're as year-over-year impact impact pop Remember, second going divestiture, in and productivity Jefferson got warehouse Snacks in a

XX%. continue continue things to will to get pathway help those us a to of All

also -- be be is by fruition. helpful snacks as as that to about we'll I term. weeks. I navigate for the seeing think to QX to trends snacking through as going the It's am quarter can of growth going come relates season. And remember, that very that to about us see continue recent the very I the I snacking share continue trajectory well. And ensuring one to that And the as margin be more that understand. as it be committed we a act we're short on very out just agenda to want encouraged important balancing the thoughtful holiday on X over and is some much to latest to sustained play through is think I in think on And to

Longer we're can term, about very margin the where positioned and continue to. how again, I where good snacks continue to and be trajectory feel will to grow

Salera Our next question comes from Jim from Stephens.

the echo Pro tough Football I one. categorized exciting congratulations. as that's find It's think but industry to packaged want more than an just Mark, to food,

the I than pre-COVID. wanted the just can the let's still and does in here, comments what I is And If on gap industry on looking industry category rather, but me on just of of, the think than I the And promo of I'm just a wrong past? given if these less question. distinctions broad-based to second to. to up consumer kind important, the that's normalize back sold volume on some throughout lower some snacking. year, the approach maybe less is industry say, And the taking believe of do that level tactical kind of if being is become promo just that part correct the more I on price some headwinds, of and maybe follow

Yes.

promotion again, we things promotion line in think seeing think expect. couple I of am unprecedented -- out what there. a in I'm nature discounting. either. levels seeing feel would not deep is I there's I'm or of seeing or the I unreasonable with anything not that I I not do of of snacking, inconsistent

we've that up. the although And expect, closely. -- through I of as And on see been been moving I've watching agree, level I some think year, volume. I I we'll there. point stabilization think it's your the

I the snacking normalization you're to step back think what's on about year begin really to we of or half important the fiscal our to to see remember is going occurring. second cycle where the of snacking started

you're normalized you're not note, saw to so we the think -- to And a our compound level. And as impact going we QX, although again, QX, in important what levels. I are historical of it's to back more begin to

why We And I get relates business, certainly between I as are seems we look some category outlook other may playing bit Campbell think, you of back some into when say, are certain at categories. positive well, to a territory the businesses. a because see I in essence, than in that categories. our But it to different reality people rosier I and trends. bifurcation see little is again, mean

little and a more bit little we're organic maybe bit balanced chips. Kettle We're Although we're the really we're natural in pretzel. in in deli. salty, in in a We're more tortilla in mainstream

playing cycle we're we some bit I the half, And back But inherently that. in to said, doing think advantaged as like we're and better. to are a categories begin to that I going get

just reason I QX, base the So to use case, in get to I simply going comps get to as is lower going I to hate something always you're beginning think have this to particular a again, be you're we -- and why that QX think cycle. better. But may

X% the certainly, what's expecting necessarily expectations is in that Now the to modeling. love to improvement we back way into X%, see or to snacking what whether us of But not we're all we'd our go underpinning back gets sequential that all we're half. is what as part

millennial about power maybe momentum could strong I your level if rails tend quite prepared little And then very with with spending fit less you with remarks, on millennials and narrative the sneak a And really question. In to a product some than other Great. have premium maybe among -- groups. it's bit a of higher doesn't in households. talked broader that

to can would of you maybe better-for-you to drive could different consumer groups typically where portfolio premium a premium from And value you label with clean proposition engage other that learnings on the have parts that apply would not take so to there Rays products that any brands? spend are or

and flat the with the want product. Rao's to sound Yes. differentiated it don't But flippant response. the And of And I product, is product out experience the here of just is my incredibly better. quality

think acceleration I pressure. a fact may the got And households, little that that those including more be you've broad-based so across feeling bit economic different

framing I that I a do where conversation little quality. had a have on there other And some to lesson. of we the we occasions premium think a distinct in earlier think really that brands great benefit application is is

And so or to as where it's holiday occasion. like moments the the things highest the to we to about or talk quality best the important bring quality table entertaining or

priced that sure of essence, think have recognizable it all think in point segments premium the not I'm it have But way that difference true in of points we points consumers product. mainstream case and the feel to those And premium in we Rao's, a framing difference. that broader that's always those must every is for or in I that price with begins of great I quality a difference. the certainly, be perhaps worth most lesson. allows But and making

think as it, they I consumers reinforce that. And try

are there think make learned learned. some the the lesson biggest I you got to is so working. experience lessons think But And I

today's out conclude This we're for of all Thank you your questions call. will today. time conference And participation. for

disconnect. You may now