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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 27, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to __________________

Commission File Number: 1-3822
TCC logo_V_red.jpg
THE CAMPBELL'S COMPANY
(Exact name of registrant as specified in its charter)
New Jersey21-0419870
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1 Campbell Place
Camden, New Jersey 08103-1799
(Address of principal executive offices) (Zip Code)

(856) 342-4800
(Registrant’s telephone number, including area code)

Campbell Soup Company
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Capital Stock, par value $.0375CPBThe Nasdaq Stock Market LLC
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 (§232.405 of this chapter) 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 298,109,244 shares of capital stock outstanding as of November 25, 2024.





TABLE OF CONTENTS

2





PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
THE CAMPBELL'S COMPANY
Consolidated Statements of Earnings
(unaudited)
(millions, except per share amounts)
 
Three Months Ended
October 27, 2024October 29, 2023
Net sales$2,772 $2,518 
Costs and expenses
Cost of products sold1,905 1,730 
Marketing and selling expenses250 222 
Administrative expenses175 158 
Research and development expenses26 24 
Other expenses / (income)43 24 
Restructuring charges6 2 
Total costs and expenses2,405 2,160 
Earnings before interest and taxes367 358 
Interest expense87 49 
Interest income4 1 
Earnings before taxes284 310 
Taxes on earnings66 76 
Net earnings218 234 
Less: Net earnings (loss) attributable to noncontrolling interests— — 
Net earnings attributable to The Campbell's Company$218 $234 
Per Share — Basic
Net earnings attributable to The Campbell's Company$.73 $.79 
Weighted average shares outstanding — basic298 298 
Per Share — Assuming Dilution
Net earnings attributable to The Campbell's Company$.72 $.78 
Weighted average shares outstanding — assuming dilution301 299 
See accompanying Notes to Consolidated Financial Statements.
3




THE CAMPBELL'S COMPANY
Consolidated Statements of Comprehensive Income
(unaudited)
(millions)
Three Months Ended
October 27, 2024October 29, 2023
Pre-tax amountTax benefit (expense)After-tax amountPre-tax amountTax benefit (expense)After-tax amount
Net earnings (loss)$218 $234 
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustments$(2)$— (2)$(9)$— (9)
Cash-flow hedges:
Unrealized gains (losses) arising during the period— — — 8 (2)6 
Reclassification adjustment for losses (gains) included in net earnings1 — 1 — — — 
Pension and other postretirement benefits:
Prior service credit arising during the period7 (2)5 — — — 
Reclassification of prior service credit included in net earnings— — — — — — 
Other comprehensive income (loss)$6 $(2)4 $(1)$(2)(3)
Total comprehensive income (loss)$222 $231 
Total comprehensive income (loss) attributable to noncontrolling interests— — 
Total comprehensive income (loss) attributable to The Campbell's Company$222 $231 
See accompanying Notes to Consolidated Financial Statements.
4




THE CAMPBELL'S COMPANY
Consolidated Balance Sheets
(unaudited)
(millions, except per share amounts)
October 27, 2024July 28, 2024
Current assets
Cash and cash equivalents$808 $108 
Accounts receivable, net840 630 
Inventories1,413 1,386 
Other current assets76 66 
Total current assets3,137 2,190 
Plant assets, net of depreciation2,684 2,698 
Goodwill5,056 5,077 
Other intangible assets, net of amortization4,669 4,716 
Other assets566 554 
Total assets$16,112 $15,235 
Current liabilities
Short-term borrowings$1,212 $1,423 
Accounts payable1,453 1,311 
Accrued liabilities622 720 
Dividends payable114 115 
Accrued income taxes64 7 
Total current liabilities3,465 3,576 
Long-term debt6,705 5,761 
Deferred taxes1,425 1,426 
Other liabilities673 676 
Total liabilities12,268 11,439 
Commitments and contingencies
The Campbell's 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 capital393 437 
Earnings retained in the business4,660 4,569 
Capital stock in treasury, at cost(1,210)(1,207)
Accumulated other comprehensive income (loss)(13)(17)
Total The Campbell's Company shareholders' equity3,842 3,794 
Noncontrolling interests2 2 
Total equity3,844 3,796 
Total liabilities and equity$16,112 $15,235 
See accompanying Notes to Consolidated Financial Statements.

5

THE CAMPBELL'S COMPANY
Consolidated Statements of Cash Flows
(unaudited)
(millions)
Three Months Ended
 October 27, 2024October 29, 2023
Cash flows from operating activities:
Net earnings$218 $234 
Adjustments to reconcile net earnings to operating cash flow
Restructuring charges6 2 
Stock-based compensation19 17 
Pension and postretirement benefit expense2 1 
Depreciation and amortization109 96 
Deferred income taxes(3)7 
Net loss on sale of business25 — 
Other35 29 
Changes in working capital, net of divestiture
Accounts receivable(211)(207)
Inventories(62)(52)
Other current assets(10)(29)
Accounts payable and accrued liabilities106 82 
Other(9)(6)
Net cash provided by operating activities225 174 
Cash flows from investing activities:
Purchases of plant assets(110)(143)
Purchases of route businesses(31)(4)
Sales of route businesses29 10 
Sale of business70 — 
Other(5)— 
Net cash used in investing activities(47)(137)
Cash flows from financing activities:
Short-term borrowings, including commercial paper 668 1,103 
Short-term repayments, including commercial paper (883)(1,081)
Long-term borrowings1,144 — 
Long-term repayments(200)— 
Dividends paid(116)(114)
Treasury stock purchases(54)(28)
Payments related to tax withholding for stock-based compensation(27)(14)
Payments of debt issuance costs(9)— 
Other— (1)
Net cash provided by (used in) financing activities523 (135)
Effect of exchange rate changes on cash(1)— 
Net change in cash and cash equivalents700 (98)
Cash and cash equivalents — beginning of period108 189 
Cash and cash equivalents — end of period$808 $91 
See accompanying Notes to Consolidated Financial Statements.
6


THE CAMPBELL'S COMPANY
Consolidated Statements of Equity
(unaudited)
(millions, except per share amounts)
 The Campbell's Company Shareholders’ Equity  
 Capital StockAdditional Paid-in
Capital		Earnings Retained in the
Business		Accumulated Other Comprehensive
Income (Loss)		Noncontrolling
Interests		 
 IssuedIn TreasuryTotal
Equity
 SharesAmountSharesAmount
Balance at July 30, 2023
323 $12 (25)$(1,219)$420 $4,451 $(3)$2 $3,663 
Net earnings (loss)234 — 234 
Other comprehensive income (loss)(3)— (3)
Dividends ($.37 per share)
(112)(112)
Treasury stock purchased(1)(28)(28)
Treasury stock issued under stock-based compensation plans  1 35 (32)— 3 
Balance at October 29, 2023
323 $12 (25)$(1,212)$388 $4,573 $(6)$2 $3,757 
Balance at July 28, 2024
323 $12 (25)$(1,207)$437 $4,569 $(17)$2 $3,796 
Net earnings (loss)218 — 218 
Other comprehensive income (loss)4 — 4 
Dividends ($.37 per share)
(111)(111)
Treasury stock purchased(1)(54)(54)
Treasury stock issued under stock-based compensation plans1 51 (44)(16)(9)
Balance at October 27, 2024
323 $12 (25)$(1,210)$393 $4,660 $(13)$2 $3,844 
See accompanying Notes to Consolidated Financial Statements.
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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 The Campbell's Company, formerly known as 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 28, 2024.
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 August 3, 2025. There will be 53 weeks in 2025. There were 52 weeks in 2024.
2. Recent Accounting Pronouncements
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. We adopted the guidance in the fourth quarter of 2023, with the exception of the annual rollforward requirement, which we will adopt in our 2025 annual reporting. The adoption did not have a material impact on our consolidated financial statements. See Note 18 for additional information.
In November 2023, the FASB issued guidance to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. In addition, the guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment and contains other disclosure requirements. The purpose of the guidance is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In December 2023, the FASB issued guidance to improve income tax disclosures by requiring disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. The guidance should be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In November 2024, the FASB issued guidance to improve disclosures by requiring additional details about specific types of expenses (purchases of inventory, employee compensation, depreciation and intangible asset amortization) included in certain expense captions. The guidance requires disclosure of the total amount of selling expenses and, on an annual basis, disclosure of the definition of selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The guidance should be applied on a prospective basis with the option to apply the standard retrospectively. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
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3.Acquisition
On August 7, 2023, we entered into a merger agreement to acquire Sovos Brands, Inc. (Sovos Brands) for $23.00 per share. On March 12, 2024, we completed the acquisition. Sovos Brands' portfolio includes a variety of pasta sauces, dry pasta, soups, frozen entrées, frozen pizza and yogurts, all of which are sold in North America under the brand names Rao’s, Michael Angelo’s and noosa. Total purchase consideration was $2.899 billion, which was determined as follows:
(Millions)
Cash consideration paid to Sovos Brands shareholders(1)
$2,307
Cash paid for share-based awards(2)
32
Cash consideration paid directly to shareholders$2,339
Cash paid for transaction costs of Sovos Brands 32
Repayment of Sovos Brands existing indebtedness and accrued interest486
Total cash consideration$2,857
Fair value of replacement share-based awards(3)
42
Total consideration$2,899
___________________________________________
(1)    Consideration paid to Sovos Brands shareholders which reflects $23.00 per share.
(2)    Represents cash paid to equity award holders of Sovos Brands restricted stock and restricted stock unit awards attributable to pre-combination service. This excludes $3 million of cash paid that was recognized as expense.
(3)    We issued replacement equity awards in settlement of certain Sovos Brands equity awards that did not become vested in connection with the acquisition. The portion of fair value of the replacement awards attributable to pre-combination service was $42 million and is included in the purchase consideration. We recognized $26 million of expense related to accelerated vesting of certain replacement awards in the third quarter of 2024.
The cash portion of the acquisition was funded through a 2024 Delayed Draw Term Loan Credit Agreement of $2 billion and cash on hand.
The table below presents the fair value that was allocated to acquired assets and assumed liabilities:
(Millions)Estimated Fair Value
Cash$240 
Accounts receivable96 
Inventories130 
Other current assets5 
Plant assets100 
Other intangible assets1,776 
Other assets16 
Total assets acquired$2,363 
Accounts payable$96 
Accrued liabilities56 
Accrued income taxes1 
Long-term debt9 
Deferred taxes407 
Other liabilities11 
Total liabilities assumed$580 
Net assets acquired$1,783 
Goodwill1,116 
Total consideration$2,899 
The excess of the purchase price over the estimated fair values of identifiable net assets was recorded as $1.116 billion of goodwill. The goodwill is not deductible for tax purposes. The goodwill was primarily attributable to future growth opportunities, anticipated synergies, and intangible assets that did not qualify for separate recognition. The goodwill is included in the Meals & Beverages segment.
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The purchase price allocation of Sovos Brands is preliminary and is subject to the finalization of certain items, including valuations and tax balances, which will be completed within the allowable measurement period.
The identifiable intangible assets of Sovos Brands consist of:
(Millions)Type Life in YearsValue
TrademarksNon-amortizableIndefinite$1,470 
TrademarksAmortizable2076 
Customer relationshipsAmortizable20to30230 
Total identifiable intangible assets$1,776 
As of October 27, 2024, the weighted-average remaining useful life of amortizable intangible assets was 26 years.
We incurred $9 million of costs associated with the acquisition in the three-month period ended October 29, 2023.
For the three-month period ended October 27, 2024, the Sovos Brands acquisition contributed $310 million to Net sales and a loss of $3 million to Net earnings, including the effect of integration costs and interest expense on the debt to finance the acquisition.
The following unaudited summary information is presented on a consolidated pro forma basis as if the Sovos Brands acquisition had occurred on August 1, 2022:
Three Months Ended
(Millions)October 29, 2023
Net sales$2,791 
Net earnings attributable to The Campbell's Company$215 
The pro forma results are not necessarily indicative of the combined results had the Sovos Brands acquisition been completed on August 1, 2022, nor are they indicative of future combined results. The pro forma amounts include adjustments to interest expense for financing the acquisition, to amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets and plant assets, and related tax effects. The pro forma results include adjustments to reflect amortization of the acquisition date fair value adjustment to inventories, expenses related to accelerated vesting of replacement awards and severance and retention bonuses as of August 1, 2022.
4. Divestiture
On August 26, 2024, we sold our Pop Secret popcorn business for $70 million. We recognized a pre-tax loss on the sale of $25 million, which included allocated goodwill. In connection with the sale, we will provide certain transition services to support the business.
The business had net sales of $9 million and $29 million for the three-month periods ended October 27, 2024 and October 29, 2023, respectively. Earnings were not material in the periods. The results of the business were reflected within the Snacks reportable segment.
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5. 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 July 30, 2023
$(1)$(4)$2 $(3)
Other comprehensive income (loss) before reclassifications(9)6 — (3)
Losses (gains) reclassified from accumulated other comprehensive income (loss)— — — — 
Net current-period other comprehensive income (loss)(9)6 — (3)
Balance at October 29, 2023
$(10)$2 $2 $(6)
Balance at July 28, 2024
$(10)$(9)$2 $(17)
Other comprehensive income (loss) before reclassifications(2)— 5 3 
Losses (gains) reclassified from accumulated other comprehensive income (loss)
— 1 — 1 
Net current-period other comprehensive income (loss)(2)1 5 4 
Balance at October 27, 2024
$(12)$(8)$7 $(13)
_____________________________________
(1)Included no tax as of October 27, 2024, July 28, 2024, October 29, 2023 and July 30, 2023.
(2)Included a tax benefit of $2 million as of October 27, 2024 and July 28, 2024, tax expense of $1 million as of October 29, 2023 and a tax benefit of $1 million as of July 30, 2023.
(3)Included tax expense of $3 million as of October 27, 2024, and $1 million as of July 28, 2024, October 29, 2023 and July 30, 2023.
Amounts related to noncontrolling interests were not material.
The amounts reclassified from Accumulated other comprehensive income (loss) consisted of the following:
Three Months Ended
(Millions)October 27, 2024October 29, 2023Location of Loss (Gain) Recognized in Earnings
Losses (gains) on cash-flow hedges:
Forward starting interest rate swaps$1 $— Interest expense
Total before tax$1 $— 
Tax expense (benefit)— — 
Loss (gain), net of tax$1 $— 
6. Goodwill and Intangible Assets
Goodwill
The following table shows the changes in the carrying amount of goodwill:
(Millions)Meals & BeveragesSnacksTotal
Net balance at July 28, 2024
$2,102 $2,975 $5,077 
Divestiture(1)
— (21)(21)
Net balance at October 27, 2024
$2,102 $2,954 $5,056 
____________________________________
(1)On August 26, 2024, we sold our Pop Secret popcorn business. See Note 4 for additional information.

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Intangible Assets
The following table summarizes balance sheet information for intangible assets, excluding goodwill:
October 27, 2024July 28, 2024
(Millions)CostAccumulated AmortizationNetCostAccumulated AmortizationNet
Amortizable intangible assets
Customer relationships$1,060 $(319)$741 $1,060 $(300)$760 
Definite-lived trademarks76 (2)74 76 (2)74 
Total amortizable intangible assets$1,136 $(321)$815 $1,136 $(302)$834 
Indefinite-lived trademarks
Rao's$1,470 $1,470 
Snyder's of Hanover620 620 
Lance350 350 
Kettle Brand318 318 
Pace292 292 
Pacific Foods280 280 
Cape Cod187 187 
Various other Snacks(1)
337 365 
Total indefinite-lived trademarks$3,854 $3,882 
Total net intangible assets$4,669 $4,716 
____________________________________
(1)The carrying amount at July 28, 2024 included the $28 million Pop Secret trademark, which was divested with the sale of the business in 2025. See Note 4 for additional information.
Amortization expense was $20 million for the three-month period ended October 27, 2024, and $17 million for the three-month period ended October 29, 2023. Amortization expense for both the three-month periods ended October 27, 2024 and October 29, 2023 included $7 million of accelerated amortization expense on customer relationships, which began in the fourth quarter of 2023 due to the loss of certain contract manufacturing customers. As of October 27, 2024, amortizable intangible assets had a weighted-average remaining useful life of 19 years. Amortization expense is estimated to be approximately $70 million in 2025 and $40 million per year for the following four years.
The $1.47 billion carrying value of the Rao's trademark associated with the Sovos Brands acquisition approximates fair value. Excluding the carrying value of the Rao's trademark and the Pop Secret trademark, as of the 2024 annual impairment testing, indefinite-lived trademarks with approximately 10% or less of excess coverage of fair value over carrying value had an aggregate carrying value of $1.293 billion and included the Snyder's of Hanover, Pace, Pacific Foods and certain other Snacks trademarks.
The estimates of future cash flows used in determining the fair value of goodwill and intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, assumed royalty rates, economic conditions, market conditions and cost of capital. Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets. The actual cash flows could differ materially from management’s estimates due to changes in business conditions, operating performance and economic conditions.
7. Segment Information
Our reportable segments are as follows:
•Meals & Beverages, which consists of our soup, simple meals and beverage products in retail and foodservice in the U.S. and Canada. The segment includes the following products: Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Pacific Foods broth, soups and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Swanson canned poultry; V8 juices and beverages; Campbell's tomato juice; and as of March 12, 2024, Rao's pasta sauces, dry pasta, frozen entrées, frozen pizza and soups, Michael Angelo’s frozen entrées and pasta sauces; and noosa yogurts. The segment also includes snacking products in foodservice and Canada; and
•Snacks, which consists of Pepperidge Farm cookies, crackers and fresh bakery and frozen products, including Goldfish crackers; Snyder’s of Hanover pretzels; Lance sandwich crackers; Cape Cod potato chips; Kettle Brand potato chips;
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Late July snacks; and Snack Factory pretzel crisps, and other snacking products in retail in the U.S. The segment also includes the snacking and meals and beverages retail business in Latin America. The segment included the results of the Pop Secret popcorn business, which was sold on August 26, 2024.
We refer to the following products as our "leadership brands": Campbell's condensed and ready-to-serve soups; Chunky soups; Swanson broth, stocks and canned poultry; Pacific Foods broth, soups and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; V8 juices and beverages; Rao's pasta sauces, dry pasta, frozen entrées, frozen pizza and soups; Pepperidge Farm cookies, crackers and fresh bakery; Goldfish crackers; Snyder's of Hanover pretzels; Lance sandwich crackers; Cape Cod potato chips; Kettle Brand potato chips; Late July snacks; and Snack Factory pretzel crisps.
We evaluate segment performance before interest, taxes and costs associated with restructuring activities, cost savings and optimization initiatives, impairment charges and corporate expenses. Unrealized gains and losses on outstanding undesignated commodity hedging activities are excluded from segment operating earnings and are recorded in Corporate as these open positions represent hedges of future purchases. Upon closing of the contracts, the realized gain or loss is transferred to segment operating earnings, which allows the segments to reflect the economic effects of the hedge without exposure to quarterly volatility of unrealized gains and losses. Only the service cost component of pension and postretirement expense is allocated to segments. All other components of expense, including interest cost, expected return on assets, amortization of prior service credits and recognized actuarial gains and losses are reflected in Corporate and not included in segment operating results. Asset information by segment is not discretely maintained for internal reporting or used in evaluating performance.
Three Months Ended
(Millions)October 27, 2024October 29, 2023
Net sales
Meals & Beverages$1,706 $1,404 
Snacks1,066 1,114 
Total$2,772 $2,518 
Three Months Ended
(Millions)October 27, 2024October 29, 2023
Earnings before interest and taxes
Meals & Beverages$337 $287 
Snacks142 161 
Corporate income (expense)(1)
(106)(88)
Restructuring charges(2)
(6)(2)
Total$367 $358 
_______________________________________
(1)Represents unallocated items. Costs related to cost savings and optimization initiatives were $29 million in the three-month period ended October 27, 2024, and $11 million in the three-month period ended October 29, 2023. Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were gains of $4 million in the three-month period ended October 27, 2024, and losses of $15 million in the three-month period ended October 29, 2023. Accelerated amortization expense related to customer relationship intangible assets was $7 million in the three-month periods ended October 27, 2024 and October 29, 2023. Insurance recoveries of $1 million and costs of $3 million related to a cybersecurity incident were included in the three-month periods ended October 27, 2024 and October 29, 2023, respectively. Litigation expenses related to the Plum baby food and snacks business, which was divested on May 3, 2021, and certain other litigation matters were $1 million and $2 million and were included in the three-month periods ended October 27, 2024 and October 29, 2023, respectively. A loss on the sale of our Pop Secret popcorn business of $25 million was included in the three-month period ended October 27, 2024. A postretirement actuarial loss of $2 million was included in the three-month period ended October 27, 2024. Costs of $9 million associated with the acquisition of Sovos Brands were included in the three-month period ended October 29, 2023.
(2)See Note 8 for additional information.
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Our net sales based on product categories are as follows:
Three Months Ended
(Millions)October 27, 2024October 29, 2023
Net sales
Soup$852 $860 
Snacks1,128 1,173 
Other simple meals613 302 
Beverages179 183 
Total$2,772 $2,518 
Soup includes various soup, broths and stock products. Snacks include cookies, pretzels, crackers, popcorn, potato chips, tortilla chips and other salty snacks and baked products. Other simple meals include sauces, yogurts, pasta, frozen entrées, canned poultry, frozen pizza, gravies and beans. Beverages include V8 juices and beverages, Campbell’s tomato juice and Pacific Foods non-dairy beverages.
8. Restructuring Charges, Cost Savings Initiatives and Other Optimization Initiatives
Multi-year Cost Savings Initiatives and Snyder's-Lance, Inc. (Snyder's-Lance) Cost Transformation Program and Integration
Continuing Operations
Beginning in 2015, we implemented initiatives to reduce costs and to streamline our organizational structure.
Over the years, we expanded these initiatives by continuing to optimize our supply chain and manufacturing networks, as well as our information technology infrastructure.
On March 26, 2018, we completed the acquisition of Snyder's-Lance. Prior to the acquisition, Snyder's-Lance launched a cost transformation program following a comprehensive review of its operations with the goal of significantly improving its financial performance. We continued to implement this program and identified opportunities for additional cost synergies as we integrated Snyder's-Lance.
In 2022, we expanded these initiatives as we continued to pursue cost savings by further optimizing our supply chain and manufacturing network and through effective cost management. In the second quarter of 2023, we announced plans to consolidate our Snacks offices in Charlotte, North Carolina, and Norwalk, Connecticut, into our headquarters in Camden, New Jersey.
A summary of the pre-tax charges recognized in the Consolidated Statements of Earnings related to these initiatives is as follows:
Three Months Ended
(Millions)October 29, 2023Total Program
Restructuring charges$2 $297 
Administrative expenses5 437 
Cost of products sold3 128 
Marketing and selling expenses2 23 
Research and development expenses1 10 
Total pre-tax charges$13 $895 
A summary of the pre-tax costs associated with the initiatives is as follows:
(Millions)
Total Program
Severance pay and benefits
$253 
Asset impairment/accelerated depreciation134 
Implementation costs and other related costs
508 
Total$895 
Of the aggregate $895 million pre-tax costs incurred, approximately $720 million were cash expenditures.
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Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges. A summary of the pre-tax costs associated with segments is as follows:
(Millions)
Total Program
Meals & Beverages$288 
Snacks383 
Corporate224 
Total$895 
As of July 28, 2024, we substantially completed the multi-year cost savings initiatives and Snyder's-Lance cost transformation program and integration. Certain phases that had not been fully implemented were incorporated into the 2025 cost savings initiatives described below.
Sovos Brands Integration Initiatives
On March 12, 2024, we completed the acquisition of Sovos Brands. See Note 3 for additional information. We identified opportunities for cost synergies as we integrate Sovos Brands.
In 2024, we recorded Restructuring charges of $21 million for severance pay and benefits related to initiatives to achieve the synergies. The charges incurred in 2024 were associated with the Meals & Beverages segment.
In 2025, the initiatives to achieve synergies were incorporated into the cost savings initiatives described below.
2025 Cost Savings Initiatives
On September 10, 2024, we announced plans to implement cost savings initiatives beginning in 2025, including initiatives to further optimize our supply chain and manufacturing network, optimization of our information technology infrastructure and targeted cost management. We also identified additional opportunities for cost synergies as we integrate Sovos Brands. As mentioned above, we substantially completed our previous multi-year cost savings initiatives and Snyder's-Lance cost transformation program and integration. Certain initiatives from that program have been incorporated into our 2025 cost savings initiatives. Cost estimates for the 2025 initiatives, as well as timing for certain activities, are continuing to be developed.
A summary of the pre-tax charges recorded in the Consolidated Statement of Earnings related to these initiatives is as follows:
Three Months Ended
(Millions)October 27, 2024
Restructuring charges$6 
Administrative expenses11 
Cost of products sold8 
Marketing and selling expenses1 
Research and development expenses1 
Total pre-tax charges$27 
A summary of the pre-tax costs associated with the initiatives is as follows:
(Millions)
Recognized as of October 27, 2024
Severance pay and benefits
$6 
Asset impairment/accelerated depreciation9 
Implementation costs and other related costs
12 
Total$27 
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The total estimated pre-tax costs for actions that have been identified to date are approximately $190 million and we expect to incur substantially all of the costs through 2028. These estimates will be updated as the detailed plans are developed.
We expect the costs for the actions that have been identified to date to consist of the following: approximately $20 million in severance pay and benefits; approximately $50 million in asset impairment and accelerated depreciation; and approximately $120 million in implementation costs and other related costs. We expect these pre-tax costs to be associated with our segments as follows: Meals & Beverages - approximately 72%; Snacks - approximately 12% and Corporate - approximately 16%.
Of the aggregate $190 million of pre-tax costs identified to date, we expect approximately $135 million will be cash expenditures. In addition, we expect to invest approximately $215 million in capital expenditures, of which we invested $18 million as of October 27, 2024. The capital expenditures primarily relate to optimization of production within our manufacturing network, implementation of our existing SAP enterprise-resource planning system for Sovos Brands and optimization of information technology infrastructure and applications.
A summary of the restructuring activity and related reserves is as follows:
(Millions)Severance Pay and Benefits
Implementation Costs and Other Related
Costs(3)
Asset Impairment/Accelerated DepreciationTotal Charges
Accrued balance at July 28, 2024(1)
$36 
2025 charges
6 12 9 $27 
2025 cash payments
(7)
Accrued balance at October 27, 2024(2)
$35 
__________________________________ 
(1)Associated with the multi-year cost savings initiatives and Snyder's-Lance cost transformation program and integration, and the Sovos Brands integration initiatives described above. Includes $12 million of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.
(2)Includes $12 million of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.
(3)Includes other costs recognized as incurred that are not reflected in the restructuring reserve in the Consolidated Balance Sheet. The costs are included in Administrative expenses, Cost of products sold, Marketing and selling expenses and Research and development expenses in the Consolidated Statements of Earnings.
Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges. A summary of the pre-tax costs associated with segments is as follows:
Three Months Ended
(Millions)October 27, 2024
Meals & Beverages$21 
Snacks3 
Corporate3 
Total$27 
Other Optimization Initiatives
In the second quarter of 2024, we began implementation of an initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network. Pursuant to this initiative we will purchase certain Pepperidge Farm and Snyder's-Lance routes where there are opportunities to unlock greater scale in select markets, combine them and sell the combined routes to independent contractor distributors. We expect to execute this program in a staggered rollout and to incur expenses of up to approximately $115 million through 2029. In the three-month period ended October 27, 2024, we incurred $8 million in Marketing and selling expenses related to this initiative. As of October 27, 2024, we have incurred $13 million in Marketing and selling expenses related to this initiative.
9. Earnings per Share (EPS)
For the periods presented in the Consolidated Statements of Earnings, the calculations of basic EPS and EPS assuming dilution vary in that the weighted average shares outstanding assuming dilution include the incremental effect of stock options and other share-based payment awards, except when such effect would be antidilutive. The earnings per share calculation for the three-month periods ended October 27, 2024 and October 29, 2023, excludes less than 1 million stock options that would have been antidilutive.
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10. Pension and Postretirement Benefits
Components of net periodic benefit expense (income) were as follows:
Three Months Ended
PensionPostretirement
(Millions)October 27, 2024October 29, 2023October 27, 2024October 29, 2023
Service cost$3 $3 $— $— 
Interest cost15 16 2 2 
Expected return on plan assets(20)(20)— — 
Actuarial losses (gains)— — 2 — 
Net periodic benefit expense (income)$(2)$(1)$4 $2 
The actuarial loss for the three-month period ended October 27, 2024 related to the remeasurement of our postretirement plan due to a plan amendment. The actuarial loss was primarily due to a decrease in the discount rate used to determine the benefit obligation.
11. Leases
The components of lease costs were as follows:
Three Months Ended
(Millions)October 27, 2024October 29, 2023
Operating lease cost$29 $24 
Finance lease - amortization of right-of-use (ROU) assets6 4 
Finance lease - interest on lease liabilities1 — 
Short-term lease cost15 19 
Variable lease cost65 53 
Total$116 $100 
The following tables summarize the lease amounts recorded in the Consolidated Balance Sheets:
Operating Leases
(Millions)Balance Sheet ClassificationOctober 27, 2024July 28,
2024
ROU assets, netOther assets$333 $333 
Lease liabilities (current)Accrued liabilities$92 $90 
Lease liabilities (noncurrent)Other liabilities$268 $268 
Finance Leases
(Millions)Balance Sheet ClassificationOctober 27, 2024July 28,
2024
ROU assets, netPlant assets, net of depreciation$84 $72 
Lease liabilities (current)Short-term borrowings$29 $25 
Lease liabilities (noncurrent)Long-term debt$55 $46 
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The following table summarizes cash flow and other information related to leases:
Three Months Ended
(Millions)October 27, 2024October 29, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$27 $23 
Operating cash flows from finance leases$1 $— 
Financing cash flows from finance leases$6 $4 
ROU assets obtained in exchange for lease obligations:
Operating leases$25 $36 
Finance leases
$19 $3 
12. Short-term Borrowings and Long-term Debt
In August 2023, we filed a registration statement with the Securities and Exchange Commission that registered an indeterminate amount of debt securities. Under the registration statement we may issue debt securities from time to time, depending on market conditions. On October 2, 2024, pursuant to the registration statement, we completed the issuance of senior unsecured notes of $1.15 billion, consisting of:
•$800 million aggregate principal amount of notes bearing interest at a fixed rate of 4.75% per annum, due March 23, 2035, with interest payable semi-annually on each of March 23 and September 23 commencing March 23, 2025; and
•$350 million aggregate principal amount of notes bearing interest at a fixed rate of 5.25% per annum, due October 13, 2054, with interest payable semi-annually on each of April 13 and October 13 commencing April 13, 2025.
The notes contain customary covenants and events of default. If a change of control triggering event occurs, we will be required to offer to purchase the notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the purchase date. In October 2024, we used a portion of the net proceeds from the issuance of the notes to repay $200 million of the $400 million outstanding under our 2022 Delayed Draw Term Loan Credit Agreement due November 15, 2025 and a portion of our outstanding commercial paper. We have $1.15 billion aggregate principal amount of senior notes maturing in March 2025, which we intend to repay by using a portion of the proceeds from the issuance of the notes along with cash on hand and issuing commercial paper.
13. Financial Instruments
The principal market risks to which we are exposed are changes in foreign currency exchange rates, interest rates and commodity prices. In addition, we are exposed to price changes related to certain deferred compensation obligations. In order to manage these exposures, we follow established risk management policies and procedures, including the use of derivative contracts such as swaps, rate locks, options, forwards and commodity futures. We enter into these derivative contracts for periods consistent with the related underlying exposures, and the contracts do not constitute positions independent of those exposures. We do not enter into derivative contracts for speculative purposes and do not use leveraged instruments. Our derivative programs include instruments that qualify for hedge accounting treatment and instruments that are not designated as accounting hedges.
Concentration of Credit Risk
We are exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. To mitigate counterparty credit risk, we enter into contracts only with carefully selected, leading, credit-worthy financial institutions, and distribute contracts among several financial institutions to reduce the concentration of credit risk. We did not have credit risk-related contingent features in our derivative instruments as of October 27, 2024, or July 28, 2024.
We are also exposed to credit risk from our customers. During 2024, our largest customer accounted for approximately 22% of our consolidated net sales. Our five largest customers accounted for approximately 47% of our consolidated net sales in 2024.
We closely monitor credit risk associated with counterparties and customers.
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Foreign Currency Exchange Risk
We are exposed to foreign currency exchange risk, primarily the Canadian dollar and Euro, related to intercompany transactions and third-party transactions. We utilize foreign exchange forward purchase and sale contracts and option contracts to hedge these exposures. The contracts are either designated as cash-flow hedging instruments or are undesignated. We hedge portions of our forecasted foreign currency transaction exposure with foreign exchange forward contracts for periods typically up to 18 months. The notional amount of foreign exchange forward contracts accounted for as cash-flow hedges was $99 million as of October 27, 2024, and $108 million as of July 28, 2024. Changes in the fair value on the portion of the derivative included in the assessment of hedge effectiveness of cash-flow hedges are recorded in other comprehensive income (loss), until earnings are affected by the variability of cash flows. For derivatives that are designated and qualify as hedging instruments, the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in earnings under a systematic and rational method over the life of the hedging instrument and is presented in the same statement of earnings line item as the earnings effect of the hedged item. Any difference between the change in the fair value of the hedge components excluded from the assessment of effectiveness and the amounts recognized in earnings is recorded as a component of other comprehensive income (loss). The notional amount of foreign exchange forward and option contracts that are not designated as accounting hedges was $458 million as of October 27, 2024, and $189 million as of July 28, 2024.
Interest Rate Risk
We manage our exposure to changes in interest rates by optimizing the use of variable-rate and fixed-rate debt. From time to time, we may use interest rate swaps in order to maintain our variable-to-total debt ratio within targeted guidelines. We manage our exposure to interest volatility on future debt issuances by entering into forward starting interest rate swaps or treasury lock contracts to hedge the rate on the interest payments related to the anticipated debt issuance. The forward starting interest rate swaps or treasury lock contracts are either designated as cash-flow hedging instruments or are undesignated. Changes in the fair value on the portion of the derivative included in the assessment of hedge effectiveness of cash-flow hedges are recorded in other comprehensive income (loss), and reclassified into Interest expense over the life of the debt issued. The change in fair value on undesignated instruments is recorded in Interest expense. In conjunction with the issuance of senior unsecured notes on October 2, 2024, due on March 23, 2035, we settled forward starting interest rate swaps with a notional value of $700 million at a gain of less than $1 million. The gain on these instruments was recorded in other comprehensive income (loss) and will be recognized in Interest expense over the life of the debt. There were no forward starting interest rate swaps or treasury lock contracts outstanding as of October 27, 2024 and July 28, 2024.
Commodity Price Risk
We principally use a combination of purchase orders and various short- and long-term supply arrangements in connection with the purchase of raw materials, including certain commodities and agricultural products. We also enter into commodity futures, options and swap contracts to reduce the volatility of price fluctuations of wheat, diesel fuel, soybean oil, natural gas, cocoa, aluminum, corn and soybean meal. Commodity futures, options and swap contracts are either designated as cash-flow hedging instruments or are undesignated. We hedge a portion of commodity requirements for periods typically up to 18 months. There were no commodity contracts designated as cash-flow hedges as of October 27, 2024, or July 28, 2024. The notional amount of commodity contracts not designated as accounting hedges was $145 million as of October 27, 2024, and $200 million as of July 28, 2024. The change in fair value on undesignated instruments is recorded in Cost of products sold.
We have a supply contract under which prices for certain raw materials are established based on anticipated volume requirements over a twelve-month period. Certain prices under the contract are based in part on certain component parts of the raw materials that are in excess of our needs or not required for our operations, thereby creating an embedded derivative requiring bifurcation. We net settle amounts due under the contract with our counterparty. The notional amount was $29 million as of October 27, 2024, and $48 million as of July 28, 2024. The change in fair value on the embedded derivative is recorded in Cost of products sold.
Deferred Compensation Obligation Price Risk
We enter into swap contracts which hedge a portion of exposures relating to the total return of certain deferred compensation obligations. These contracts are not designated as hedges for accounting purposes. Unrealized gains (losses) and settlements are included in Administrative expenses in the Consolidated Statements of Earnings. We enter into these contracts for periods typically not exceeding 12 months. The notional amounts of the contracts were $80 million as of October 27, 2024, and $71 million as of July 28, 2024.
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The following table summarizes the fair value of derivative instruments on a gross basis as recorded in the Consolidated Balance Sheets as of October 27, 2024, and July 28, 2024:
(Millions)Balance Sheet ClassificationOctober 27, 2024July 28,
2024
Asset Derivatives
Derivatives designated as hedges:
Foreign exchange contractsOther current assets$2 $2 
Total derivatives designated as hedges$2 $2 
Derivatives not designated as hedges:
Commodity contractsOther current assets$3 $6 
Deferred compensation contractsOther current assets1 3 
Foreign exchange contractsOther current assets1 — 
Total derivatives not designated as hedges$5 $9 
Total asset derivatives$7 $11 
(Millions)Balance Sheet ClassificationOctober 27, 2024July 28,
2024
Liability Derivatives
Derivatives not designated as hedges:
Commodity contractsAccrued liabilities$10 $16 
Foreign exchange contractsAccrued liabilities1 — 
Total derivatives not designated as hedges$11 $16 
Total liability derivatives$11 $16 
We do not offset the fair values of derivative assets and liabilities executed with the same counterparty that are generally subject to enforceable netting agreements. However, if we were to offset and record the asset and liability balances of derivatives on a net basis, the amounts presented in the Consolidated Balance Sheets as of October 27, 2024, and July 28, 2024, would be adjusted as detailed in the following table:
October 27, 2024July 28, 2024
(Millions)Gross Amounts Presented in the Consolidated Balance SheetGross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting AgreementsNet AmountGross Amounts Presented in the Consolidated Balance SheetGross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting AgreementsNet Amount
Total asset derivatives$7 $(1)$6 $11 $(1)$10 
Total liability derivatives$11 $(1)$10 $16 $(1)$15 
We are required to maintain cash margin accounts in connection with funding the settlement of open positions for exchange-traded commodity derivative instruments. Cash margin asset balances of $2 million at October 27, 2024 and July 28, 2024 were included in Other current assets in the Consolidated Balance Sheets.
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The following table shows the effect of our derivative instruments designated as cash-flow hedges in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:
 Total Cash-Flow Hedge
OCI Activity
(Millions) October 27, 2024October 29, 2023
Three Months Ended
OCI derivative gain (loss) at beginning of quarter$(11)$(5)
Effective portion of changes in fair value recognized in OCI:
Foreign exchange contracts— 5 
Forward starting interest rate swaps— 3 
Amount of loss (gain) reclassified from OCI to earnings:Location in Earnings
Forward starting interest rate swapsInterest expense1 — 
OCI derivative gain (loss) at end of quarter$(10)$3 
Based on current valuations, the amount expected to be reclassified from OCI into earnings within the next 12 months is a loss of $1 million.
The following table shows the total amounts of line items presented in the Consolidated Statements of Earnings, in which the effects of derivative instruments designated as cash-flow hedges are recorded and the total effect of hedge activity on these line items:
Three Months Ended
October 27, 2024October 29, 2023
(Millions)Interest
expense		Interest
expense
Consolidated Statements of Earnings:$87 $49 
Loss (gain) on cash-flow hedges:
Amount of loss (gain) reclassified from OCI to earnings$1 $— 
The amount excluded from effectiveness testing recognized in each line item of earnings using an amortization approach was not material in all periods presented.
The following table shows the effects of our derivative instruments not designated as hedges in the Consolidated Statements of Earnings:
Location of Loss (Gain) Recognized in EarningsThree Months Ended
(Millions)October 27, 2024October 29, 2023
Foreign exchange contractsCost of products sold$— $(1)
Commodity contracts