Campbell Soup Co. CPB-N joined Kellogg Co. and Kraft Heinz Co. in raising its annual sales forecast on Wednesday after price hikes and easing supply chain constraints helped the maker of Swanson broth and Goldfish crackers top quarterly estimates.
The New Jersey-based soup maker’s third-quarter margin rose as it increased prices at a time when the packaged food industry remains pressured by soaring freight and raw material costs.
Easing supply snarls and improved staffing has helped Campbell meet robust demand for its soups and sauces as consumers prioritize food essentials over discretionary goods amid surging inflation.
While the company saw some consumers trading down to cheaper private label alternatives, Chief Executive Mark Clouse said he sees more room for pricing, even as several retailers and packaged goods firms including P&G and Coca-Cola have cautioned of a pushback from consumers.
“This idea that there is no room for any more pricing, I don’t think that’s particularly accurate or realistic,” Clouse told analysts on a post-earnings call.
Campbell now expects fiscal year 2022 organic net sales to rise between 1% and 2%, compared with its prior estimate of a 1% decline to a 1% rise.
The company posted an adjusted per-share profit of 70 cents compared with estimates of 61 cents, but kept its annual profit forecast unchanged due to inflationary pressures.
“In six months or a year, pricing may be harder to come by, but for now it’s coming through extremely well,” J.P. Morgan analyst Ken Goldman said.
Net sales rose 7% to $2.13 billion in the three months to May 1, also beating Refinitiv estimates of $2.05 billion.
Shares in the company were up 1%, while the broader market was down.
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