Investing
Campbell Soup sticks to full-year forecast, shares fall
© Reuters. Cans of Campbell’s Soup are displayed in a supermarket in New York City, U.S. February 15, 2017. REUTERS/Brendan McDermid
By Ananya Mariam Rajesh
(Reuters) -Campbell Soup shares dropped as much as 9% on Wednesday, after the company disappointed investors by maintaining its full-year forecasts for sales and profit despite beating quarterly earnings.
Packaged food companies such as Campbell, Kraft Heinz (NASDAQ:) and Kellogg (NYSE:) Co have been raising prices to counter the impact of higher input costs stemming from supply chain snags and the Russia-Ukraine war.
The move helped Campbell Soup (NYSE:) post a 5% rise in quarterly sales, although its margins slipped to 30% from 31.2%.
Investors are likely disappointed with the company keeping its forecast unchanged as they were anticipating a raise, said CFRA Research analyst Arun Sundaram, but added that the decision reflected a “prudent level of conservatism.”
Campbell expects annual net sales to grow between 8.5% and 10%, compared with analysts’ estimates for a rise of 9.5%, according to Refinitiv IBES data. It forecast adjusted profit of $2.95 to $3 per share, versus estimates of $3.01.
Its average selling price rose 12% in the quarter, but a 7% decline in total volumes signaled that Americans, pressured by rising food prices, were moving away to private-label products that are more affordable.
“While we do foresee an improvement in volumes in the future, we are unlikely to see meaningful growth until the pressure of price increases subsides,” Sundaram said.
CEO Mark Clouse said in a post-earnings call that volumes were also impacted by retailers cutting back on rebuilding inventory compared to last year, when most of them restocked heavily to battle a shortage in products due to pandemic-driven supply chain disruptions.
Excluding one-time items, the Goldfish crackers maker earned 68 cents per share, beating estimates of 64 cents, while net sales of $2.23 billion was in line with expectations.
Read the full article here
-
Passive Income7 days ago
Are You Running Your Business, or Is Your Business Running You?
-
Side Hustles7 days ago
How Your Body Language Can Help Win a Disagreement
-
Side Hustles6 days ago
How to Be Unapologetically You and Why It Matters
-
Side Hustles7 days ago
OpenAI Raises Record $6.6 Billion, Adds 50 Million New Users
-
Side Hustles6 days ago
With AI Magicx, It’s Like Getting an Entire Creative Team in One Money-Saving AI Tool
-
Investing7 days ago
7 Marketing Strategies to Help Your Startup Grow and Scale
-
Investing5 days ago
Nvidia CEO Jensen Huang: Demand For Blackwell AI Is Insane
-
Side Hustles5 days ago
Mark Zuckerberg Is Now Second Richest Person in the World