Campbell Soup beats quarterly estimates on steady demand for quick meals (updated)

Sovos Brands

06/03/2024 12:33

(Adds details in paragraph 6, shares in paragraph 10)
       March 6 (Reuters) - Campbell Soup  CPB.N  edged past
market estimates for quarterly sales and profit on Wednesday and
stuck to its annual forecasts, helped by steady demand for
branded, ready-to-eat meals and strength in its food service
business. 
    Prices across Campbell's products rose 1%, while overall
volumes dipped 2% during the reported quarter, as holiday
promotions encouraged shoppers to indulge in its Goldfish
crackers and Pepperidge Farm cookies.
    The pace of price increases has slowed from last year's
mid-double-digit rise, as most food companies try to limit
pricing to cope with subdued demand.
    Packaged foods peers Kraft Heinz  KHC.N , Mondelez  MDLZ.O ,
McCormick  MKC.N , Hershey  HSY.N  and PepsiCo  PEP.O  have all
flagged softer volume growth in their latest quarterly results.
    Still, benefits from prior price hikes and easing supply
chains helped Campbell's gross profit margin climb 31.6%, from
last year’s 30.5%.
    Net sales in its Meals & Beverages segment - Campbell's
biggest revenue churner - declined 2%, owing to weaker demand
for retail products in the U.S., including ready-to-serve and
condensed soups as well as Pace Mexican sauces. Sales in the
Snacks division were flat in the quarter.
    The company, which is set to close its buyout of Rao's sauce
maker Sovos Brands next week, posted second-quarter net sales of
$2.46 billion, slightly above analysts' average estimate of
$2.44 billion, according to LSEG data.
    It logged adjusted earnings of 80 cents per share, better
than the 77 cents analysts were expecting. 
    The New Jersey-based firm reaffirmed its fiscal-year 2024
target for net sales and earnings for the second time in a row.
    Shares of the company were down marginally in trading before
the bell.

 (Reporting by Savyata Mishra in Bengaluru; Editing by Pooja
Desai)
 ((Savyata.Mishra@thomsonreuters.com))