Campbell Soup Co.
CPB -0.86%
translated higher prices into double-digit sales growth and raised its outlook for the second consecutive quarter, anticipating that consumers will continue turning to its products as they tighten their budgets and pull back on spending elsewhere.
The soup and snack maker said sales rose 12% to $2.49 billion for the quarter ended Jan. 29, topping analyst expectations as prices jumped 14% while volumes slipped 2%.
The company said sales of its most popular power brands, including Goldfish crackers and Pepperidge Farm cookies, led growth in its snacks business, with higher prices and volumes compared to a year-ago quarter that was beset by supply constraints. Higher sales of soups and pasta sauces meanwhile drove growth in its meals and beverages business.
Campbell, based in Camden, N.J., is lifting its outlook for the second quarter in a row, citing a stronger supply chain and favorable demand despite recent price increases. The company now expects sales to rise as much as 10% from last year. It started the fiscal year expecting no more than 6% growth and lifted that forecast to between 7% and 9% in December.
Campbell is also expecting higher earnings for the year. Adjusted earnings, which strip out one-time items, are now projected to rise at least 3.5%, instead of 2% as previously forecasted. The lift comes after Campbell posted stronger adjusted earnings than analysts had been expecting in the most recently completed quarter.
The higher earnings came despite generally flat margins and a 10% jump in Campbell’s marketing costs and administrative expenses.
The company said Wednesday that it is looking for areas to cut costs, including by consolidating its snacks offices in Charlotte, N.C., and Norwalk, Conn., into its New Jersey headquarters. The company said it remains on track to deliver $1 billion in savings by the end of fiscal 2025.
Shares ticked up more than half a percentage point to $52.50 in premarket trading.
Like other food makers, the company has been battling soaring costs from supply-chain constraints that arose during the pandemic and worsened after Russia invaded Ukraine a year ago. Food producers have been raising prices to pass those inflated costs onto customers, who have broadly maintained their spending on food and other essentials while pulling back on discretionary purchases.
Campbell boosted its annual sales and profit outlook in December after a fiscal first quarter in which higher prices led to a double-digit jump in sales while only denting volumes by 1%. Executives said at the time that inflation was pushing consumers to spend less on dining out and move away from more expensive grocery categories.
After years of declining sales, the company received a boost during the height of the Covid-19 pandemic amid a rise in at-home cooking. It sought to keep its sales momentum and attract younger consumers through measures including its first soup can redesign in 50 years.
Write to Dean Seal at dean.seal@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Campbell Soup Co.
CPB -0.86%
translated higher prices into double-digit sales growth and raised its outlook for the second consecutive quarter, anticipating that consumers will continue turning to its products as they tighten their budgets and pull back on spending elsewhere.
The soup and snack maker said sales rose 12% to $2.49 billion for the quarter ended Jan. 29, topping analyst expectations as prices jumped 14% while volumes slipped 2%.
The company said sales of its most popular power brands, including Goldfish crackers and Pepperidge Farm cookies, led growth in its snacks business, with higher prices and volumes compared to a year-ago quarter that was beset by supply constraints. Higher sales of soups and pasta sauces meanwhile drove growth in its meals and beverages business.
Campbell, based in Camden, N.J., is lifting its outlook for the second quarter in a row, citing a stronger supply chain and favorable demand despite recent price increases. The company now expects sales to rise as much as 10% from last year. It started the fiscal year expecting no more than 6% growth and lifted that forecast to between 7% and 9% in December.
Campbell is also expecting higher earnings for the year. Adjusted earnings, which strip out one-time items, are now projected to rise at least 3.5%, instead of 2% as previously forecasted. The lift comes after Campbell posted stronger adjusted earnings than analysts had been expecting in the most recently completed quarter.
The higher earnings came despite generally flat margins and a 10% jump in Campbell’s marketing costs and administrative expenses.
The company said Wednesday that it is looking for areas to cut costs, including by consolidating its snacks offices in Charlotte, N.C., and Norwalk, Conn., into its New Jersey headquarters. The company said it remains on track to deliver $1 billion in savings by the end of fiscal 2025.
Shares ticked up more than half a percentage point to $52.50 in premarket trading.
Like other food makers, the company has been battling soaring costs from supply-chain constraints that arose during the pandemic and worsened after Russia invaded Ukraine a year ago. Food producers have been raising prices to pass those inflated costs onto customers, who have broadly maintained their spending on food and other essentials while pulling back on discretionary purchases.
Campbell boosted its annual sales and profit outlook in December after a fiscal first quarter in which higher prices led to a double-digit jump in sales while only denting volumes by 1%. Executives said at the time that inflation was pushing consumers to spend less on dining out and move away from more expensive grocery categories.
After years of declining sales, the company received a boost during the height of the Covid-19 pandemic amid a rise in at-home cooking. It sought to keep its sales momentum and attract younger consumers through measures including its first soup can redesign in 50 years.
Write to Dean Seal at dean.seal@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8