Reaffirms Fiscal 2017 Full-year Guidance and Long-Term Targets

CAMDEN, N.J.--(BUSINESS WIRE)--Jul. 19, 2017-- Campbell Soup Company (NYSE: CPB), led by President and Chief Executive Officer Denise Morrison, will meet with investors today to discuss Campbell’s strategic imperatives designed to diversify its portfolio and meet consumers’ changing preferences.

Morrison will outline steps Campbell is taking to deliver sustainable, profitable topline growth in the rapidly-changing food industry by strengthening its core business while expanding into faster-growing spaces. These plans include building greater trust with consumers through real food, transparency and sustainability; accelerating digital marketing and e-commerce efforts; continuing to diversify Campbell’s portfolio in health and well-being; and broadening how Campbell views the faster-growing snacking category.

Management will also provide an overview of Campbell’s plans for its three divisions for the upcoming fiscal year, as well as review the company’s cost savings initiatives and plans to reinvest in the business.

Reaffirms Fiscal 2017 Guidance

Campbell reaffirmed its previous full-year guidance for fiscal 2017, which ends July 30, 2017. For the year, Campbell continues to expect net sales to change by -1 to 0 percent; adjusted Earnings Before Interest and Taxes (EBIT) to increase by 2 to 4 percent; and adjusted Earnings Per Share (EPS) to increase by 3 to 5 percent, or $3.04 to $3.09 per share.*

Campbell plans to provide fiscal 2018 guidance for net sales, adjusted EBIT and adjusted EPS when it reports fourth-quarter fiscal 2017 results on Aug. 31, 2017.

Cost Savings Initiatives and Cash Flow

Campbell expects to reach approximately $310 million in annual cost savings by the end of fiscal 2017. The company also continues to expect its current cost savings initiatives to deliver $450 million, or approximately 6 percent of sales, in annual savings by the end of fiscal 2020. This cost savings goal is incremental to the company's ongoing supply chain productivity program. Campbell expects an adjusted gross margin of approximately 38 percent* for fiscal 2017, and expects to generate approximately $1.25 billion in cash flow from operations in fiscal 2017.

Long-Term Growth Targets

Campbell reiterated its long-term targets for organic sales and earnings. The company is targeting long-term organic sales growth of 1 to 3 percent. Excluding currency translation, the company is targeting adjusted EBIT growth of 4 to 6 percent and adjusted EPS growth of 5 to 7 percent.

An audio and video webcast of the event, along with accompanying slides, will be broadcast simultaneously at investor.campbellsoupcompany.com beginning at 12:15 p.m. EDT today. A replay and transcript will be available after the event.

About Campbell Soup Company

Campbell (NYSE:CPB) is driven and inspired by our Purpose: “Real food that matters for life’s moments.” We make a range of high-quality soups and simple meals, beverages, snacks and packaged fresh foods. For generations, people have trusted Campbell to provide authentic, flavorful and readily available foods and beverages that connect them to each other, to warm memories and to what’s important today. Led by our iconic Campbell’s brand, our portfolio includes Pepperidge Farm, Bolthouse Farms, Arnott’s, V8, Swanson, Pace, Prego, Plum, Royal Dansk, Kjeldsens and Garden Fresh Gourmet. Founded in 1869, Campbell has a heritage of giving back and acting as a good steward of the planet’s natural resources. The company is a member of the Standard & Poor’s 500 and the Dow Jones Sustainability Indexes. For more information, visit www.campbellsoupcompany.com or follow company news on Twitter via @CampbellSoupCo. To learn more about how we make our food and the choices behind the ingredients we use, visit www.whatsinmyfood.com.

*Non-GAAP Reconciliation

A reconciliation of the fiscal 2016 reported (GAAP) financial information to the adjusted financial information is included at the end of this news release. A non-GAAP reconciliation is not provided for 2017 guidance since certain items are not estimable, such as pension and postretirement mark-to-market adjustments, and these items are not considered to be part of the company's ongoing business results.

Forward-Looking Statements

This release contains “forward-looking statements” that reflect the company’s current expectations about the impact of its future plans and performance on the company’s business or financial results. These forward-looking statements, including the statements made regarding fiscal 2017 sales, gross margin, EBIT and EPS guidance and long-term growth targets, rely on a number of assumptions and estimates that could be inaccurate and which are subject to risks and uncertainties. The factors that could cause the company’s actual results to vary materially from those anticipated or expressed in any forward-looking statement include (1) the company’s ability to manage changes to its organizational structure and/or business processes; (2) the company’s ability to realize projected cost savings and benefits from its efficiency programs; (3) the impact of strong competitive responses to the company’s efforts to leverage its brand power in the market; (4) the impact of changes in consumer demand for the company’s products and favorable perception of the company’s brands; (5) the impact of product quality and safety issues, including recalls and product liabilities; (6) the risks associated with trade and consumer acceptance of the company’s initiatives, including its trade and promotional programs; (7) the impact of a changing customer landscape, with value and e-commerce retailers expanding their market presence, while certain of the company’s key customers continue to increase their significance to the company’s business; (8) the impact of changing inventory management practices by certain of the company’s key customers; (9) the impact of disruptions to the company’s supply chain, including fluctuations in the supply of and inflation in energy and raw and packaging materials cost; (10) the impact of non-U.S. operations, including trade restrictions, public corruption and compliance with foreign laws and regulations; (11) the ability to complete and to realize the projected benefits of acquisitions, divestitures and other business portfolio changes; (12) the uncertainties of litigation and regulatory actions against the company; (13) the possible disruption to the independent contractor distribution models used by certain of the company’s businesses, including as a result of litigation or regulatory actions affecting their independent contractor classification; (14) the company’s ability to protect its intellectual property rights; (15) the impact of an impairment to goodwill or other intangible assets; (16) the impact of increased liabilities and costs related to the company’s defined benefit pension plans; (17) the impact of a material failure in or breach of the company’s information technology systems; (18) the company’s ability to attract and retain key talent; (19) the impact of changes in currency exchange rates, tax rates, interest rates, debt and equity markets, inflation rates, economic conditions, law, regulation and other external factors; (20) the impact of unforeseen business disruptions in one or more of the company’s markets due to political instability, civil disobedience, terrorism, armed hostilities, natural disasters or other calamities; and (21) other factors described in the company’s most recent Form 10-K and subsequent Securities and Exchange Commission filings. The company disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release.

Reconciliation of GAAP and Non-GAAP Financial Measures Fiscal Year Ended July 31, 2016

Campbell Soup Company uses certain non-GAAP financial measures as defined by the Securities and Exchange Commission in certain communications. These non-GAAP financial measures are measures of performance not defined by accounting principles generally accepted in the United States and should be considered in addition to, not in lieu of, GAAP reported measures.

The company believes that financial information excluding certain items that are not considered to be part of the ongoing business, such as those listed below, improves the comparability of year-to-year results. Consequently, the company believes that investors may be able to better understand its earnings results excluding these items. In addition, management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the company's performance.

The following tables reconcile financial information, presented in accordance with GAAP, to financial information excluding certain items.

(1) In fiscal 2016, the company incurred losses of $313 million in Costs and expenses ($200 million after tax, or $.64 per share) associated with mark-to-market adjustments for defined benefit pension and postretirement plans.

(2) In fiscal 2015, the company implemented a new enterprise design and initiatives to reduce costs and to streamline its organizational structure. In fiscal 2016, the company recorded Restructuring charges of $35 million and implementation costs and other related costs of $47 million in Administrative expenses related to the fiscal 2015 initiatives. The company also recorded a reduction to Restructuring charges of $4 million related to the fiscal 2014 initiatives. The aggregate after-tax impact of Restructuring charges, implementation costs and other related costs was $49 million, or $.16 per share.

(3) In fiscal 2016, the company recorded a gain of $25 million in Other expenses / (income) ($.08 per share) from a settlement of a claim related to the Kelsen acquisition.

(4) In fiscal 2016, as part of the annual review of intangible assets, the company recorded a non-cash impairment charge of $141 million in Other expenses / (income) ($127 million after tax, or $.41 per share) related to the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit.

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Source: Campbell Soup Company

Campbell Soup Company INVESTOR CONTACT: Ken Gosnell, 856-342-6081 Ken_Gosnell@campbellsoup.com or MEDIA CONTACT: Thomas Hushen, 856-342-5227 Thomas_Hushen@campbellsoup.com