Campbell Soup beat Wall Street estimates for third-quarter profit on Wednesday as the maker of Pepperidge Farm cookies benefited from several quarters worth of price hikes.
Packaged food companies such as Campbell, Kraft Heinz, and Kellogg have been raising the prices of their meals, beverages and snacks to offset higher input costs stemming from supply chain snags and the Russia-Ukraine war.
Shares of Campbell fell about 3% in premarket trading, after the company also maintained its annual sales and profit forecasts - a decision that some analysts attributed to a "prudent level of conservatism".
Investors are likely disappointed with the company keeping its forecast unchanged as they were anticipating a raise, said CFRA Research analyst Arun Sundaram.
The company expects annual net sales to grow between 8.5% and 10%, and forecast adjusted profit of $2.95 to $3.00 per share.
Campbell's average selling price rose 12% in the quarter, but a 7% decline in total volumes signaled that Americans pressured by rising food prices were moving away to private-label products that are more affordable.
"While we do foresee an improvement in volumes in the future, we are unlikely to see meaningful growth until the pressure of price increases subsides," Sundaram said.
CEO Mark Clouse said in a post-earnings call that volumes were also impacted by retailers cutting back on rebuilding inventory compared to last year, when most of them restocked heavily to battle a shortage in products due to pandemic-driven supply chain disruptions.
Campbell's third-quarter gross profit margin was 30%, compared with 31.2% last year, squeezed by higher costs of commodities, freight and marketing.
Excluding one-time items, the Goldfish crackers maker earned 68 cents per share, beating analysts' estimates of 64 cents, according to Refinitiv IBES data.
Net sales rose 5% to $2.23 billion, in line with expectations.
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