Campbell's serves up above-forecast quarterly earnings
The Campbell’s Company posted improved third-quarter numbers on Monday, beating analyst expectations, as under-pressure US consumers opted to cook at home.
The US food group said net sales rose 4% in the three months to 27 April, to $2.43bn, boosted by its acquisition of Sovos Brands. On an organic basis, sales rose 1%.
Analysts had forecast net sales closer to $2.43bn.
Within that, net sales in the meals and beverages division jumped 15%, helping to partially offset an 8% decline in snacks.
Adjusted earnings before interest and tax were up 2% at $362m. Diluted earnings per share eased 3% to $0.73, although that was ahead of expectations for $0.66.
Mick Beekhuizen, chief executive, said the meals and beverages unit had seen improved consumption across all consumer income groups.
He continued: "Consumers are cooking at home at the highest levels since early 2020, and turning to our brands for value, quality and convenience.
"Our overall performance reflects our strong execution and disciplined cost management in what remains a dynamic operating environment."
Consumer sentiment has weakened notably in the US in recent months, after Donald Trump’s sweeping tariff regime prompted fears of higher prices and possible recession.
Looking to the rest of the year, Campbell’s said it now expected adjusted EBIT and EPS to be at the lower end of the guidance range, due to a slower-than-anticipated recovery in the snacks business.
Net sales guidance was left unchanged, however, for growth of between 6% and 8%.
The soup producer completed its $2.3bn acquisition of convenience food specialist Sovos in 2024.