cpb-20230129

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

January 29, 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 299,475,991 shares of capital stock outstanding as of March 2, 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	33
	Item 4. Controls and Procedures	33
PART II - OTHER INFORMATION		33
	Item 1. Legal Proceedings	33

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

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CAMPBELL SOUP COMPANY

Consolidated Statements of Earnings

(unaudited)

(millions, except per share amounts)


	Three Months Ended				Six Months Ended
	January 29, 2023		January 30, 2022		January 29, 2023		January 30, 2022
Net sales	$	2,485	$	2,209	$	5,060	$	4,445
Costs and expenses
Cost of products sold	1,726		1,540		3,467		3,054
Marketing and selling expenses	217		197		418		367
Administrative expenses	162		147		320		303
Research and development expenses	21		21		42		42
Other expenses / (income)	—		(19)		18		(20)
Restructuring charges	9		—		9		—
Total costs and expenses	2,135		1,886		4,274		3,746
Earnings before interest and taxes	350		323		786		699
Interest expense	45		46		92		93
Interest income	—		—		1		—
Earnings before taxes	305		277		695		606
Taxes on earnings	73		65		166		133


Net earnings	232		212		529		473
Less: Net earnings (loss) attributable to noncontrolling interests	—		—		—		—
Net earnings attributable to Campbell Soup Company	$	232	$	212	$	529	$	473
Per Share — Basic


Net earnings attributable to Campbell Soup Company	$	.78	$	.70	$	1.77	$	1.57
Weighted average shares outstanding — basic	299		302		299		302
Per Share — Assuming Dilution


Net earnings attributable to Campbell Soup Company	$	.77	$	.70	$	1.76	$	1.56
Weighted average shares outstanding — assuming dilution	301		303		301		303

See accompanying Notes to Consolidated Financial Statements.

CAMPBELL SOUP COMPANY

Consolidated Statements of Comprehensive Income

(unaudited)

(millions)


	Three Months Ended
	January 29, 2023						January 30, 2022
	Pre-tax amount		Tax benefit (expense)		After-tax amount		Pre-tax amount		Tax benefit (expense)		After-tax amount
Net earnings (loss)					$	232					$	212
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustments	$	3	$	—	3		$	(4)	$	—	(4)

Cash-flow hedges:
Unrealized gains (losses) arising during the period	(2)		1		(1)		5		(1)		4
Reclassification adjustment for losses (gains) included in net earnings	(2)		—		(2)		—		—		—
Pension and other postretirement benefits:

Reclassification of prior service credit included in net earnings	—		—		—		(1)		—		(1)

Other comprehensive income (loss)	$	(1)	$	1	—		$	—	$	(1)	(1)
Total comprehensive income (loss)					$	232					$	211
Total comprehensive income (loss) attributable to noncontrolling interests					—						—
Total comprehensive income (loss) attributable to Campbell Soup Company					$	232					$	211

	Six Months Ended
	January 29, 2023						January 30, 2022
	Pre-tax amount		Tax benefit (expense)		After-tax amount		Pre-tax amount		Tax benefit (expense)		After-tax amount
Net earnings (loss)					$	529					$	473
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustments	$	(5)	$	—	(5)		$	(4)	$	—	(4)
Cash-flow hedges:
Unrealized gains (losses) arising during period	5		(1)		4		8		(2)		6
Reclassification adjustment for losses (gains) included in net earnings	(6)		1		(5)		—		—		—
Pension and other postretirement benefits:

Reclassification of prior service credit included in net earnings	—		—		—		(1)		—		(1)
Other comprehensive income (loss)	$	(6)	$	—	(6)		$	3	$	(2)	1
Total comprehensive income (loss)					$	523					$	474
Total comprehensive income (loss) attributable to noncontrolling interests					—						—
Total comprehensive income (loss) attributable to Campbell Soup Company					$	523					$	474

See accompanying Notes to Consolidated Financial Statements.

CAMPBELL SOUP COMPANY

Consolidated Balance Sheets

(unaudited)

(millions, except per share amounts)


	January 29, 2023		July 31, 2022
Current assets
Cash and cash equivalents	$	158	$	109
Accounts receivable, net	597		541
Inventories	1,251		1,246
Other current assets	81		67

Total current assets	2,087		1,963
Plant assets, net of depreciation	2,318		2,343
Goodwill	3,975		3,979
Other intangible assets, net of amortization	3,177		3,198
Other assets	410		409

Total assets	$	11,967	$	11,892
Current liabilities
Short-term borrowings	$	578	$	814
Payable to suppliers and others	1,374		1,334
Accrued liabilities	602		621
Dividends payable	113		114
Accrued income taxes	32		3

Total current liabilities	2,699		2,886
Long-term debt	3,992		3,996
Deferred taxes	1,076		1,074
Other liabilities	599		603

Total liabilities	8,366		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	391		415
Earnings retained in the business	4,344		4,040
Capital stock in treasury, at cost	(1,144)		(1,138)
Accumulated other comprehensive income (loss)	(4)		2
Total Campbell Soup Company shareholders' equity	3,599		3,331
Noncontrolling interests	2		2
Total equity	3,601		3,333
Total liabilities and equity	$	11,967	$	11,892

See accompanying Notes to Consolidated Financial Statements.

CAMPBELL SOUP COMPANY

Consolidated Statements of Cash Flows

(unaudited)

(millions)


	Six Months Ended
	January 29, 2023		January 30, 2022
Cash flows from operating activities:
Net earnings	$	529	$	473
Adjustments to reconcile net earnings to operating cash flow

Restructuring charges	9		—
Stock-based compensation	31		31


Pension and postretirement benefit expense (income)	3		(35)
Depreciation and amortization	176		166
Deferred income taxes	2		31



Other	51		40
Changes in working capital
Accounts receivable	(63)		(17)
Inventories	(6)		22
Other current assets	(12)		(5)
Accounts payable and accrued liabilities	38		78


Other	(26)		(18)
Net cash provided by operating activities	732		766
Cash flows from investing activities:
Purchases of plant assets	(155)		(129)

Purchases of route businesses	(3)		—
Sales of route businesses	—		2


Other	—		2
Net cash used in investing activities	(158)		(125)
Cash flows from financing activities:
Short-term borrowings, including commercial paper	1,389		444
Short-term repayments, including commercial paper	(1,626)		(486)



Dividends paid	(226)		(228)
Treasury stock purchases	(66)		(65)
Treasury stock issuances	22		1


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




Net cash used in financing activities	(525)		(352)
Effect of exchange rate changes on cash	—		(1)
Net change in cash and cash equivalents	49		288
Cash and cash equivalents — beginning of period	109		69

Cash and cash equivalents — end of period	$	158	$	357

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 October 31, 2021	323	$	12	(21)	$	(1,038)	$	372	$	3,882	$	7	$	2	$	3,237
Net earnings (loss)									212				—		212

Other comprehensive income (loss)											(1)		—		(1)
Dividends ($.37 per share)									(111)						(111)
Treasury stock purchased				—	(2)										(2)
Treasury stock issued under management incentive and stock option plans				—	1		16		—						17
Balance at January 30, 2022	323	$	12	(21)	$	(1,039)	$	388	$	3,983	$	6	$	2	$	3,352

Balance at August 1, 2021	323	$	12	(21)	$	(1,021)	$	414	$	3,742	$	5	$	2	$	3,154
Net earnings (loss)									473				—		473

Other comprehensive income (loss)											1		—		1
Dividends ($.74 per share)									(224)						(224)
Treasury stock purchased				(1)	(65)										(65)
Treasury stock issued under management incentive and stock option plans				1	47		(26)		(8)						13
Balance at January 30, 2022	323	$	12	(21)	$	(1,039)	$	388	$	3,983	$	6	$	2	$	3,352

Balance at October 30, 2022	323	$	12	(24)	$	(1,140)	$	375	$	4,224	$	(4)	$	2	$	3,469
Net earnings (loss)									232				—		232
Other comprehensive income (loss)											—		—		—
Dividends ($.37 per share)									(112)						(112)
Treasury stock purchased				—	(25)										(25)
Treasury stock issued under management incentive and stock option plans				—	21		16		—						37
Balance at January 29, 2023	323	$	12	(24)	$	(1,144)	$	391	$	4,344	$	(4)	$	2	$	3,601

Balance at July 31, 2022	323	$	12	(24)	$	(1,138)	$	415	$	4,040	$	2	$	2	$	3,333
Net earnings (loss)									529				—		529
Other comprehensive income (loss)											(6)		—		(6)
Dividends ($.74 per share)									(225)						(225)
Treasury stock purchased				(1)	(66)										(66)
Treasury stock issued under management incentive and stock option plans				1	60		(24)		—						36
Balance at January 29, 2023	323	$	12	(24)	$	(1,144)	$	391	$	4,344	$	(4)	$	2	$	3,601

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	(4)		6		—		2
Losses (gains) reclassified from accumulated other comprehensive income (loss)	—		—		(1)		(1)
Net current-period other comprehensive income (loss)	(4)		6		(1)		1
Balance at January 30, 2022	$	2	$	2	$	2	$	6

Balance at July 31, 2022	$	—	$	—	$	2	$	2
Other comprehensive income (loss) before reclassifications	(5)		4		—		(1)
Losses (gains) reclassified from accumulated other comprehensive income (loss)	—		(5)		—		(5)
Net current-period other comprehensive income (loss)	(5)		(1)		—		(6)
Balance at January 29, 2023	$	(5)	$	(1)	$	2	$	(4)

_____________________________________

(1)Included no tax as of January 29, 2023, July 31, 2022, January 30, 2022 and August 1, 2021.

(2)Included no tax as of January 29, 2023 and July 31, 2022, tax expense of $1 million as of January 30, 2022, and a tax benefit of $1 million as of August 1, 2021.

(3)Included tax expense of $1 million as of January 29, 2023, July 31, 2022, January 30, 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				Six Months Ended
(Millions)	January 29, 2023		January 30, 2022		January 29, 2023		January 30, 2022		Location of Loss (Gain) Recognized in Earnings







Losses (gains) on cash-flow hedges:
Commodity contracts	$	—	$	(2)	$	(3)	$	(3)	Cost of products sold
Foreign exchange forward contracts	(3)		1		(4)		2		Cost of products sold


Forward starting interest rate swaps	1		1		1		1		Interest expense
Total before tax	(2)		—		(6)		—
Tax expense (benefit)	—		—		1		—
Loss (gain), net of tax	$	(2)	$	—	$	(5)	$	—

Pension and postretirement benefit adjustments:
Prior service credit	$	—	$	(1)	$	—	$	(1)	Other expenses / (income)
Tax expense (benefit)	—		—		—		—
Loss (gain), net of tax	$	—	$	(1)	$	—	$	(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	(4)		—		(4)
Net balance at January 29, 2023	$	989	$	2,986	$	3,975

Intangible Assets

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


	January 29, 2023						July 31, 2022
(Millions)	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Amortizable intangible assets
Customer relationships	$	830	$	(202)	$	628	$	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						689
Total trademarks					$	2,549					$	2,549
Total net intangible assets					$	3,177					$	3,198

____________________________________