Campbell Soup Co. has slightly exceeded quarterly estimates, buoyed by sustained demand and higher prices for its branded instant foods and cookies. The company announced on the 6th that its quarterly sales and profits slightly surpassed market estimates, leading to a 2% rise in its stock during early trading.
While the prices of all Campbell products increased by 1%, the total volume decreased by 2% during the reported quarter. However, Campbell CEO Mark A. Clouse highlighted healthy volume and dollar share growth in categories such as condensed cooking soup, broth, Pepperidge Farm cookies, and Pepperidge Farm stuffing.
Clouse emphasized that the demand for cooking at home remains robust, driven by budget-conscious consumers who are opting to cook more meals at home and reducing shopping trips.
Despite the positive performance, net sales in the company’s largest revenue source, the meals & beverages segment, decreased by 2%. This decline was attributed to weakened demand for retail products in the U.S., including instant soup and Pace Mexican Sauce.
The pace of price increases has moderated compared to last year’s mid-double-digit rise, as many food companies, including Campbell, aim to manage prices amidst declining demand.
Despite this, Campbell remains cautious about the recovery in consumer spending and indicated that its sales growth rate is trending towards the lower end of its annual net sales forecast range. According to data from LSEG Data & Analytics, Campbell’s second-quarter net sales reached $2.46 billion, slightly surpassing the average estimate of $2.44 billion.
Additionally, the company reported adjusted net earnings per share of 80 cents, exceeding analysts’ expectations of 77 cents.
Campbell is on track to finalize the acquisition of Sovos Brands, a sauce manufacturer, next week. It has also reaffirmed its net sales and revenue targets for the 2024 fiscal year for the second consecutive time.