Campbell Soup raised its annual sales forecast on Wednesday, betting on higher prices, improved supply and strong demand for its packaged meals and snacks.
Shares of the Prego pasta sauces maker rose about 2% in premarket trading after it also topped market estimates for quarterly sales.
While inflation has strained household budgets, Americans are still snacking on Campbell's salty crackers and cookies, while also cutting back on restaurant orders in favour of cooking at home, boosting demand for the company's ready-to-eat meals.
Consumers were turning to Campbell's products as they look for ways to stretch their food budgets to navigate the current economic environment, Campbell's chief executive Mark Clouse said in a statement.
Supply Chain Recovery
Campbell is also benefiting from a recovery in its supply chains, which has helped the company put more of its products on store shelves and ramp up shipments in its food service segment that caters to restaurants, schools and healthcare facilities.
Organic net sales in Campbell's snacks division, which represents roughly half of its portfolio, jumped 15% in the second quarter, fuelled by robust demand for its brands including Goldfish crackers, Cape Cod potato chips and Pepperidge Farm cookies.
The company's net sales rose to $2.49 billion in the quarter ended 29 January, from $2.21 billion a year earlier, compared to analysts' average estimate of $2.44 billion in Refinitiv IBES data.
The Camden, New Jersey-based soup maker said it expected net sales to rise between 8.5% and 10% in fiscal 2023, compared with its previous forecast of 7% to 9% growth. Analysts on average were expecting an 8.3% jump to $9.27 billion.
The over 150-year-old company also raised the lower end of its forecast for annual adjusted earnings to between $2.95 and $3.00 per share, compared with its prior expectation of $2.90 to $3.00.
News by Reuters, edited by ESM – your source for the latest A Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.
