Shares of Campbell Soup (CPB) - Get Report fell on Wednesday, even as the company posted stronger-than-expected fiscal third-quarter earnings amid consumer stockpiling of its canned soup and other non-perishable staples through the coronavirus pandemic and lockdown.
The Camden, N.J.-based company posted adjusted earnings of $386 million, or 83 cents a share, for the three-month period ended April 28, vs. $294 million, or 53 cents a share, in the comparable year-ago period.
Analysts polled by FactSet had been expecting per-share earnings of 75 cents. Revenue came in at $2.24 billion, up 15% from $1.95 billion a year ago and also above analysts’ forecasts.
Consumers lining their pantries not only with the company’s iconic red-and-white cans of soup but other non-perishable foods such as Goldfish crackers, Prego sauces and Swanson canned poultry, drove sales and earnings significantly higher during the quarter, CEO Mark Clouse said.
Sales in the company’s meal and beverages segment surged 20% during the quarter, driven by a 35% jump in U.S. sales of condensed and ready-to-serve soups and broth, Campbell said.
Sales in its snacks segment, meantime, which includes Pepperidge Farm cookies as well as Kettle Brand and Cape Cod potato chips, Pop Secret popcorn and Snyder’s of Hanover pretzels, rose 9%.
The company experienced “unprecedented broad-based demand across our brands as consumers sought food that delivered comfort, quality and value,” resulting in “double-digit increases in organic sales,” he said.
The surge in demand prompted Campbell to raise its guidance for the remainder of its 2020 fiscal year. The company now expects adjusted per-share earnings in the range of between $2.87 and 2.92 a share, up from its previous forecast of between $2.55 and $2.60 a share.
Net sales are expected to ring in at $8.1 billion, an increase of between 5.5% and 6.5%. The company had previously expected sales to come in within a -1% and 1% range.
The stronger-than-expected earnings and sales appeared to give investors a bit of indigestion on Wednesday, however, with Campbell Soup stock falling 2.75% at $50.57.