(Reuters) – Campbell Soup Co raised its annual sales and profit forecasts after quarterly revenue topped estimates on Wednesday, signaling regular demand for its soups and sauces whilst the corporate raised prices to offset rising costs.
Packaged food manufacturers in North America have seen relatively little pushback from consumers despite multiple rounds of price increases this 12 months, as high inflation drives people to cook at home reasonably then spend on eating out.
“Through a mix of inflation-driven pricing actions and productivity improvements, we’ve got substantially mitigated significant inflationary pressure within the quarter,” Campbell Soup Chief Executive Officer Mark Clouse said.
Campbell’s upbeat results follow those from Kellogg, General Mills and Kraft Heinz, who’ve in recent months said that several rounds of price increases haven’t yet dented demand for his or her products significantly.
Still, despite the fact that groceries and essentials are among the many last to see a drop in demand during economic downturns, analysts warn that firms similar to Campbell could soon begin to suffer as lower-income and elderly shoppers switch to cheaper store-brand products.
The Prego pasta sauces owner expects fiscal 12 months 2023 net sales to rise 7% to 9%, compared with its previous forecast of a 4% to six% increase.
It also expects fiscal 12 months 2023 adjusted earnings per share between $2.90 and $3.00, compared with its prior expectations of $2.85 to $2.95.
The corporate’s net sales rose 15% to $2.58 billion in the primary quarter in comparison with analysts’ expectations of $2.45 billion, in keeping with IBES data from Refinitiv.
Shares of the Camden, Recent Jersey-based soupmaker rose 2% in premarket trading.
(Reporting by Granth Vanaik and Uday Sampath in Bengaluru; Editing by Vinay Dwivedi)
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