Campbell Soup Company has raised its 2020 outlook after its third-quarter results were positively impacted by an increase in demand for its products amid the pandemic.
The owner of the Prego and Kettle brands reported a 15% rise in net sales to $2.24 billion, driven by increased demand in both its units as at-home food consumption soared.
This is a significant improvement compared to its first and second-quarter results and represents the impact of the coronavirus on its sales, as an increasing amount of consumers are stockpiling and eating packaged food.
In the three months to 26 April 2020, Campbell’s meals and beverages segment witnessed net sales growth of 20% to $1.21 billion. This was largely driven by gains across its US retail business with its soups – including condensed soups, ready-to-serve soups and broth – recording 35% growth. Sales were partially offset by declines in food service.
Within its snacks unit, net sales grew 9% compared to the prior year, reflecting strong performance by its fresh bakery products, Pepperidge Farm cookies, Kettle Brand crisps and Snyder’s of Hanover pretzels.
Meanwhile, operating earnings of Campbell’s meals and beverages unit grew 35% and its snacks business 19%, predominantly due to volume gains.
Campbell has since raised its guidance significantly for fiscal 2020. The company now predicts its sales to increase 5.5% to 6.5%, compared to the previous estimation of -1% to 1%.
Mark Clouse, Campbell’s president and CEO, said: “In the quarter, we experienced unprecedented broad-based demand across our brands as consumers sought food that delivered comfort, quality and value.
“This demand resulted in double-digit increases in organic sales, adjusted EBIT and adjusted EPS. In addition, Campbell’s products were purchased by millions of new households, with total company household penetration increasing over 6 percentage points in the quarter compared to the third quarter of fiscal 2019.”
Earlier this year, Campbell announced four new sustainability goals, including a pledge to ensure that 100% of the packaging used by its brands is recyclable or compostable by 2030.
© FoodBev Media Ltd 2020
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