Campbell Soup Co expects current-quarter sales to be pressured due to supply chain disruptions caused by a major winter storm and deep freeze that engulfed several US states.
The soups and snacks maker, which benefited from rising demand for its ready-to-eat or quick-fix meals during the pandemic, said its plant in Texas, where it makes Prego pasta sauces, was closed for two weeks in December.
An increasing number of COVID-19 cases also led to fewer staff operating its plant during winter, a key period for the soup maker when consumers seek comfort food.
"We crossed the double-digit line on absenteeism, which was really the highest we had seen," chief executive officer Mark Clouse told analysts, adding that it led to delayed shipments.
"It really did reduce a little bit of our firepower as we had expected to be able to get in front of consumption and ship a bit ahead of it."
Forecast
The company forecast sales to fall 3.5% to 2.5% in fiscal 2021, following a year when demand surged as consumers stockpiled on soups and snacks before the pandemic-induced lockdowns.
A gradual reopening of restaurants and the rollout of vaccines could reduce consumers' reliance on packaged food.
J.P. Morgan analyst Ken Goldman said the forecast would be a let down to some investors, considering the food-at-home category has performed better than anticipated in general.
Campbell expects adjusted annual earnings between $3.03 and $3.11 per share, compared with analysts' average estimate of $3.03 per share, according to IBES data from Refinitiv.
Quarterly Performance
Second-quarter sales rose 5.4% to $2.28 billion, but fell below expectations, hurt by declines in its food services segment that sells products to bakeries and restaurants, and pandemic-led supply constraints.
"Nearly 75% of our brands grew or held share which was an important goal for the quarter... we are confident in the long-term growth potential of Campbell," Clouse said.
