Campbell Soup reports double digit growth in Q3 net to US$2.24bn

USA – Campbell Soup’s net sales during the third quarter of fiscal year 2020 increased by 15% to US$2.24 billion, from US$1.953 billion posted in a comparative period last year, as the company witnessed favourable growth in volume in both meals & beverages and snacks with the stay-at-home mandate.

The company’s organic net sales, excluding the impact from the October 2019 divested European chips business, further increased by 17% – which food and beverage company said was a reflection of increased demand of its products.

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“In the quarter, we experienced unprecedented broad-based demand across our brands as consumers sought food that delivered comfort, quality and value,” said Mark Clouse, Campbell’s President and Chief Executive Officer.

“This demand resulted in double-digit increases in organic sales, adjusted EBIT and adjusted EPS. In addition, Campbell’s products were purchased by millions of new households, with total company household penetration increasing over 6 percentage points in the quarter compared to the third quarter of fiscal 2019.”

Campbell’s meals & beverages  segment registered an impressive 20% growth to US$1.210 billion driven primarily by gains across the U.S. retail business, including gains in soups, Prego pasta sauces, V8 beverages, Campbell’s pasta, Pace Mexican sauces and Swanson canned poultry, as well as gains in Canada, partially offset by declines in foodservice.

The company’s snacks segments also reported a 9% growth in nets sales to US$1.028 billion. Campbell said that the growth in the segment was majorly driven by volume gains reflecting increased demand of food purchases for at-home consumption, as well as base business performance.

This performance during the third quarter further boosted the company’s nine-months net sales by 4% to US$6.58 billion while organic net sales increased 5% from the prior year driven by gains in both meals & beverages and snacks.

Campbell has made adjustments to its business which has seen the company integrate its retail business in Latin America into the snacks segment. Prior to fiscal 2020, the business in Latin America was managed as part of the Meals & Beverages segment.

As a result of the performance in the third quarter, the food company has decided to review its fiscal 2020 outlook upwards. For the full year, Campbell expects a 5.5 to 6.5% growth in net sales, 12% to 14% rise in adjusted EBIT and 25 to 27% growth in adjusted EPS.

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Commenting on the company’s response to the pandemic, Mark Clouse said: “Since the onset of the COVID-19 pandemic, we have simplified our mission to keep our people safe, while meeting the urgent need for food and supporting the communities in which we operate.

“I am incredibly proud of how the entire Campbell organization has mobilized and want to thank our team, especially those on the front lines, for continuing to step up to ensure our food is readily available across North America.

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