Campbell’s (CPB) up 4%, product price hikes incoming
16:39, 8 December 2021
Campbell Soup Company stock rose on Wednesday as the food company posted first-quarter earnings that beat earnings estimates, at the same time it will take action against rising costs.
The company – whose iconic soup cans were painted by 20th century New York artist Andy Warhol – also makes pasta sauces and vegetable juice drinks.
For the fiscal first quarter ended 31 October, net income fell to $261m (£198m) from $309m a year earlier on net sales which dropped 4% to $2.24bn from the $2.34bn reported last year.
Adjusted earnings of 89 cents beat analysts’ estimates of earnings of 81 cents while sales fell short of the predicted $2.28bn, according to figures widely available on financial news sites.
Stock up 4%
At 10:50 am EDT (UTC-5), the stock was up 4% at $41.59.
On a conference call, CEO Mark Clouse said the company's net sales reflected “labour constraints and transport capacity” and that the company is preparing to adapt to the current economic environment.
“We recently announced additional inflation-justified pricing actions to offset continuing increases in ingredient and packaging costs, logistics and labour,” Clouse said on the call.
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Q3 price hike
Campbell's CEO said this round of price setting “should be effective in January and evident on the shelf in the third quarter.”
The company was also seeing the results of steps it took to mitigate 2021’s “Great Resignation”, which has seen people stepping away from the workforce.
“We saw increased onboarding, lower absenteeism and improved (staff) retention,” Clouse said.
Has over 14,000 staff
Campbell's has approximately 14,100 employees, according to its most recent annual report.
The company also said it was on track to achieve $850m in cost savings by the current fiscal year.
Looking ahead, the company said it expects a 2% decline in fiscal year 2022 net sales and a 4% drop in adjusted EPS.