Campbell reported results for its third quarter fiscal 2023 ended April 30, 2023.
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Net sales in the quarter, both reported and organic, increased 5% versus the prior year to $2.2 billion.
Favorable inflation-driven net price realization was partially offset by an expected decline in volume / mix, which was driven by lapping the prior year retailer inventory rebuild as well as lower volume consumption due to elasticities.
Gross profit increased to $668 million from $665 million in the prior year. As a percent of sales, gross profit margin was 30.0% compared to 31.2% in the prior year. Excluding items impacting comparability, adjusted gross profit increased to $689 million from $671 million.
Excluding items impacting comparability, adjusted gross profit margin decreased 60 basis points to 30.9% primarily driven by unfavorable volume / mix, with favorable net price realization and supply chain productivity improvements more than offsetting higher cost inflation and other supply chain costs.
The third quarter of fiscal 2022 benefited from a 50-basis point insurance settlement.
As reported EBIT decreased to $254 million from $294 million in the prior year. Excluding items impacting comparability, adjusted EBIT decreased 2% compared to the prior year to $313 million primarily due to higher adjusted other expenses, related to lower pension and postretirement benefit income this year.
Higher adjusted gross profit more than offset higher adjusted administrative expenses and higher marketing and selling expenses. Lower pension and postretirement benefit income this year drove an approximate $12 million headwind to adjusted EBIT in the quarter.
Net interest expense was $46 million compared to $50 million in the prior year. Excluding items impacting comparability, adjusted net interest expense was $46 million in the prior year.
The effective tax rate was 23.1% compared to 23.0% in the prior year. Excluding items impacting comparability, the adjusted effective tax rate increased 70 basis points to 23.6% compared to 22.9% in the prior year.
As reported EPS decreased to $0.53 per share compared to $0.62 per share in the prior year. Excluding items impacting comparability, adjusted EPS decreased $0.02, or 3%, to $0.68 per share compared to $0.70 per share in the prior year, primarily reflecting the decrease in adjusted EBIT and a higher adjusted effective tax rate.
Lower pension and postretirement benefit income this year drove an approximate $0.03 headwind to adjusted EPS in the quarter. ■