Campbell Soup Co. made significant strides in its third-quarter earnings report, surpassing expectations with robust performance in its meals and beverages segment, which effectively offset weaker results in snacks. This positive outcome was reflected in the company’s premarket trading, where its stock rose by 0.9% following the announcement.
In terms of financial metrics, while the net income for the quarter declined to $133 million, or 44 cents a share, from $160 million, or 53 cents a share, compared to the same period last year, the adjusted earnings per share of 75 cents exceeded the FactSet consensus of 70 cents. Additionally, net sales experienced a healthy increase, reaching $2.37 billion, which surpassed the FactSet consensus of $2.34 billion.
A closer look at the company’s business segments reveals a mixed picture. Meal and beverage sales surged by 14.8% to $1.27 billion, highlighting robust performance in this category. In contrast, snack sales saw a decline of 2.1% to $1.10 billion. Within the meals and beverages segment, volume and mix increased by 1% compared to the previous year, although prices saw a slight decrease of 1%. Conversely, volume and mix for snacks decreased by 1%, while prices remained flat.
Looking ahead, Campbell Soup Co. adjusted its full-year guidance ranges to reflect its acquisition of Sovos Brands Inc., the parent company of Rao’s, which was completed on March 12. The company raised its sales-growth outlook to a range of 3% to 4%, up from the previous guidance of down 0.5% to up 1.5%. However, the earnings per share outlook was slightly lowered to $3.07 to $3.10 from $3.09 to $3.15.
Despite facing challenges, Campbell’s stock has seen a 2.2% increase year-to-date. However, it still trails behind the Consumer Staples Select Sector SPDR ETF, which has gained 8.3%, and the broader S&P 500, which has advanced 10.9% over the same period.