Campbell Soup Co. (CPB) - Get Report posted weaker-than-expected third quarter earnings Wednesday, and lowered its full-year profit forecast, as pandemic demand for canned foods and prepared snacks waned as shops and restaurants reopened and vaccine rollouts accelerated.
Campbell said adjusted earnings for the three months ending on May 2, the group's fiscal third quarter, were pegged at 57 cents per share, down 31% from the same period last year and 9 cents shy of the Street consensus forecast. Group revenues, Campbell said, slumped 11.6% to $1.98 billion, essentially matching analysts' estimates.
Looking into its 2021 financial year, Campbell said it sees net sales falling between 3% and 3.5% and adjusted earnings in the region of $2.90 to $2.93 per share, down from a prior forecast of between $3.03 and $3.11 per share.
“While we recognized the third quarter would be a challenging net sales comparison to the demand surge at the onset of the COVID-19 pandemic a year ago, we faced additional headwinds," said CEO Mark Clouse. "Our results were impacted by a rising inflationary environment, short-term increases in supply chain costs, and some executional pressures as we continued to advance our transformation agenda, primarily in our Snacks division."
"We are confident that these are all addressable, and we are taking appropriate actions, including putting pricing in place for the next fiscal year," Clouse added. "Our confidence is further strengthened by the underlying health of our brands. Nearly three-quarters of our portfolio gained or held share in the quarter, with most of our core categories having grown at higher rates than pre-pandemic levels."
Campbell shares were marked 7% lower in early trading following the earnings release to change hands at $45.70 each, a move that would nudge the stock into negative territory for the year.