Campbell full-year sales decline 2% as pandemic boom wanes and inflation sets in

USA – American processed food and snack company Campbell Soup has recorded a 2% decline in full-year net sales as markets return to normalcy following a pandemic boom in 2020 that saw sales for food companies sky rocket. 

Revenue for the year stood at US$8.48 billion and Campbell says that three quarters of its brand portfolio grew or held share, “demonstrating strong underlying brand health and momentum”.  

The company’s meals & beverages unit witnessed net sales fall by 2%, mainly due to declines in foodservice, partially offset by growth in V8 beverages. 

Organic net sales for Campbell’s snacks division were flat, as gains in the company’s salty snacks portfolio and in Goldfish crackers were offset by declines in Lance sandwich crackers and in partner brands within the Snyder’s-Lance portfolio. 

In the fourth quarter, the company’s net sales decreased 11% to US$1.87 billion – as Campbell lapped one of the strongest quarters of the pantry loading craze of 2020. 

The good news is that Q4 revenue beat the consensus by 330 basis points and is up 5% in the two-year stack.  

More importantly, due to an extra week in the 2020 Q4 reporting period, organic sales are down only 4% from last year, and they’re up 9% versus 2 years ago in evidence of consumer strength and market share gains made by the company. 

A very challenging fiscal 2022

Moving into fiscal 2022, Campbell says it expects a “very challenging environment” as accelerating inflationary pressures, a constrained labour market and the continued cycling of elevated demand are expected to negatively impact the business. 

“As we head into fiscal 2022, we have robust in-market momentum on our brands, strong plans to manage inflation, and a talented and committed team to lead through what we expect to be a very challenging environment,” Chief Executive Officer Mark said. 

The company forecasts net sales in a range of flat to a decline of 2% for fiscal 2022, a guidance that is below analysts’ estimates of a nearly 1% fall, according to Reuters.  

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Campbell has revealed that it is planning to increase prices of some products, as it deals with higher ingredient and freight costs that are likely to plague packaged foods makers through the year. 

Additionally, company plans to selectively push prices up to deal with potential jumps in raw material costs, including steel. 

To prevent loss of market shares, the company also looks to keep up the sales level by modernizing packaging and launching new items. 

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