Key Takeaways
- Campbell Soup reported snack sales dropped in the fiscal third quarter from a year earlier, and it lowered its full-year earnings guidance.
- However, food and beverage sales helped offset the snacks decline, boosted by Campbell Soup’s acquisition of Rao’s owner Sovos Brands.
- Campbell Soup’s revenue beat analysts’ estimates and the company raised its projection for full-year revenue.
- CEO Mark Clouse said Sovos “is bringing significant incremental growth to our company as we continue to navigate the pace of consumer recovery.”
Campbell Soup (CPB) reported third-quarter revenue that beat analysts’ estimates on the strength of its food and beverage sales, though the food giant’s snack sales dropped as economic pressures affect consumers’ habits.
Campbell Soup reported fiscal 2024 third-quarter revenue of $2.37 billion, up 6.3% from the year-ago period and above analysts’ estimates compiled by Visible Alpha. However, diluted earnings per share (EPS) of 44 cents declined 17% from the same period a year earlier and missed projections.
Campbell Soup noted its revenue gains were fueled by last year’s purchase of Sovos Brands, the owner of the Rao’s food brand, and that organic sales were flat from the year earlier. Sales of meal and beverage products jumped 14.8% to $1.27 billion, but snack sales declined 2.1% to $1.1 billion as economic pressures influence consumers’ purchases.
Sovos Acquisition Brings ‘Significant Incremental Growth’
Campbell Soup CEO Mark Clouse said that Campbell Soup’s acquisition of Sovos, which was completed on March 12, “already is bringing significant incremental growth to our company as we continue to navigate the pace of consumer recovery.”
Because of the addition of Sovos, Campbell Soup raised its full-year revenue growth estimate to 3% to 4%, up from the previous outlook of a decline of 0.5% to 1.5% growth. However, it cut its adjusted EPS forecast to $3.07 to $3.10, from the earlier $3.09 to $3.15.
Shares of Campbell Soup were little changed at $44.13 as of 12:15 p.m. ET Wednesday. They’ve gained about 2% since the start of the year.