CAMDEN, N.J. - Campbell Soup Company (NASDAQ:NYSE:CPB), a leading food producer known for its iconic brands, announced today the sale of its noosa yoghurt business to Lakeview Farms, LLC. The deal transfers ownership of the yogurt brand to Lakeview Farms, a company specializing in fresh dips, desserts, and specialty products. The financial terms of the agreement remain undisclosed.
The divestiture comes after Campbell's acquisition of Sovos Brands, Inc. in March 2024, which included noosa in its portfolio. Following the acquisition, Campbell's declared its intention to explore strategic options for noosa, citing the yogurt category as non-essential to its core business strategy.
For the trailing twelve months ending in October 2024, noosa generated net sales of $177 million. Campbell's anticipates that the sale will not significantly affect its fiscal 2025 financial outcomes. However, the transaction is expected to have a slight dilutive effect on earnings per share, estimated at approximately $0.01 for fiscal 2025.
Mick Beekhuizen, Executive Vice President and President of Campbell's Meals & Beverages, commented on the sale, expressing satisfaction with the transition of noosa to a company with a strategic interest in the refrigerated category. He emphasized that the sale aligns with Campbell's focus on its portfolio of leading brands.
The finalization of the sale is contingent upon customary closing conditions, which include obtaining regulatory approvals. The companies expect the transaction to close in the first quarter of the 2025 calendar year.
In advising Campbell's on the transaction, Goldman Sachs provided financial guidance, while legal counsel was offered by Davis Polk & Wardwell LLP.
Campbell Soup Company, with a history spanning over 150 years, has built a reputation for delivering beloved food and beverage products. The company, with a net sales figure of $9.6 billion in fiscal 2024, manages an array of well-known brands and is listed on both the S&P 500 and several indices recognizing sustainable and ethical business practices.
The information regarding the sale is based on a press release statement.
In other recent news, Campbell Soup Company has seen a flurry of activity. The company's fourth-quarter results for fiscal 2024 exceeded expectations, driven by improved volume across divisions and double-digit growth in earnings before interest and taxes (EBIT) and earnings per share (EPS), largely influenced by the acquisition of Sovos Brands. Additionally, Campbell Soup successfully raised $1.15 billion through the offering of senior unsecured notes, reflecting strategic financial planning.
Multiple analyst firms have adjusted their outlook on Campbell Soup. Notably, Bernstein SocGen Group upgraded the stock rating from Market Perform to Outperform, while DA Davidson downgraded the stock from Buy to Neutral. Argus upgraded the stock from Hold to Buy, setting a new price target of $59. Other firms like RBC Capital, TD Cowen, and Wells Fargo (NYSE:WFC) adjusted their price targets to $51, while Stifel maintained a steady target of $50.
Piper Sandler maintained a Neutral rating on Campbell Soup shares, despite concerns of a potential strike by US dockworkers. The firm's recent survey highlighted the popularity of Campbell's Goldfish brand among teens, marking it as the top preferred snack for the seventh consecutive time. Despite potential disruptions from a looming dockworkers strike, Campbell Soup appears to be well-prepared.
Looking ahead, Campbell Soup provided optimistic guidance for fiscal year 2025, projecting net sales growth of approximately 9% to 11%, adjusted EBIT growth of 9% to 11%, and an increase in adjusted earnings per share of 1% to 4%. These recent developments underscore the dynamic nature of the company's operations and its strategic planning.
InvestingPro Insights
Campbell Soup Company's recent sale of noosa yoghurt aligns with its strategy to focus on core brands, as reflected in the company's financial metrics and market position. According to InvestingPro data, Campbell's market capitalization stands at $13.18 billion, underlining its significant presence in the food industry. The company's revenue for the last twelve months reached $9,636 million, showing a modest growth of 2.98% year-over-year.
An InvestingPro Tip highlights that Campbell has maintained dividend payments for 54 consecutive years, demonstrating a strong commitment to shareholder returns. This is particularly relevant in light of the recent divestiture, as it suggests the company's ability to generate consistent cash flow even while streamlining its portfolio. The current dividend yield of 3.31% may be attractive to income-focused investors.
Another InvestingPro Tip indicates that analysts predict the company will be profitable this year. This forecast, combined with the company's adjusted P/E ratio of 15.13, suggests that the market views Campbell's earnings potential positively, even after accounting for the slight dilution expected from the noosa sale.
For investors seeking a deeper understanding of Campbell's financial health and market position, InvestingPro offers additional tips and insights. In fact, there are 11 more InvestingPro Tips available for Campbell Soup Company, providing a comprehensive view of the company's strengths and potential challenges in the evolving food industry landscape.
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