Snacking frenzy pushing Campbell’s Goldfish to $1B brand
Despite persistent inflation, company gives upbeat guidance
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For the second straight quarter, Campbell’s Goldfish was the company’s largest revenue driver for crackers, climbing to $1 billion in annual sales.
In the Camden, N.J.-based company's fiscal second quarter earnings call on Wednesday, CEO Mark Clouse said Goldfish "continues to be the star of the snacks business."
"As one of the company's primary growth engines, the brand continues to perform extremely well with 21% consumption growth and share gains of 0.7 points," he continued. "Our strategy to expand consumer target has been more successful than expected with growth versus prior year in both buy rates and repeat rates among households without children about equal to households with children."
The Campbell Soup Co. brand Pepperidge Farm Milano cookies are seen on a supermarket shelf.
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The maker of Pepperidge Farm, Swnson and Prego products reported net earnings of $232 million for the quarter ended Jan. 29 compared to $212 million a year ago. Diluted earnings per share were 80 cents, beating out Wall Street’s 74 cent estimate by analysts tracking the stock on FactSet.
Meanwhile, sales rose 12% to $2.5 billion. That also beat analyst’s expectations of $2.44 billion.
Clouse said the company used a variety of levers to mitigate inflation, including targeted pricing, cost savings initiatives and productivity improvements.
Organic net sales increased 13%, supported by favorable inflation-driven net price realization and strong consumer demand.
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The company raised the lower end of its fiscal 2023 adjusted earnings per share forecast to $2.95 per share, up from $2.90 per share while implying a 3.5% gain from the prior year.
Campbell Soup Company
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CPB | CAMPBELL SOUP CO. | 43.31 | +0.30 | +0.70% |
Despite ongoing inflationary pressures, the food and snack company said sales in 2023 are now expected to rise as much as 10% from last year versus the forecast of 7% to 9% offered in December and guidance of up to 6% growth given in September.
CFO Carrie Anderson said Campbell's expects core inflation to moderate through the year.
"With inflation still expected in the low teens for the full year, we are driving other margin enhancing initiatives in addition to price. We've already delivered $870 million of our multiyear cost savings program and remain on track to achieve $1 million by the end of fiscal 2025," Anderson said.
Campbell said they would continue to navigate expected inflation with pricing, albeit using lower incremental pricing levels in the second half as compared to the first half and with continued productivity.