Campbell’s revenue misses estimates as supply chain shocks bite

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Cans of Campbell’s Soup are displayed at a supermarket in New York, U.S., February 15, 2017. REUTERS/Brendan McDermid

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  • Soup maker sees supply chain issues ease
  • Reaffirms earnings forecast for the full year

March 9 (Reuters) – Campbell Soup Co fell short of market expectations for quarterly revenue on Wednesday as the packaged food company grappled with supply chain constraints, while demand for its products has eased from pandemic highs.

The COVID-19 pandemic has destroyed supply chains for companies in the packaged food industry, leading to increased costs, delivery delays, and labor shortages in the United States.

For food companies like Campbell, demand has fallen from the peak seen during the pandemic, when consumers stocked up on frozen meals, snacks and soups at home. Campbell’s organic sales were down 2% in the quarter.

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“Our second quarter was challenging as we faced a tough comparison and overcame labor and supply constraints, made even more difficult by the push from Omicron,” the chief executive said. of Campbell, Mark Clouse, in a statement.

Higher procurement spending caused Campbell’s quarterly gross margin to decline to 30.3% from 34.4% last year.

Campbell also said he expects inflation for the year to be higher than expected, but maintained his earnings forecast which was well above estimates as he sees supply chain issues. ease during the second half of the year.

Cracker maker Goldfish said it saw labor pressures easing in the second half of the year, with buoyant demand and the benefit of price increases expected to bolster profits.

It reaffirmed its full-year adjusted earnings forecast of $2.75 to $2.85 per share, versus analysts’ estimate of $2.79, according to Refinitiv IBES.

Campbell’s second-quarter net sales fell to $2.21 billion from $2.28 billion a year earlier, missing expectations of $2.24 billion, while its earnings per share of 69 cents were consistent with estimates.

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Reporting by Deborah Sophia in Bengaluru; Editing by Maju Samuel

Our standards: The Thomson Reuters Trust Principles.

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