Campbell Soup Co said that it fell short of market expectations for quarterly revenue, in a sign that demand for its sauces and broths is slowing from the pandemic-led surge.
With the COVID-19 pandemic shutting restaurants across the world, packaged food makers benefited from customers stockpiling at home on frozen meals, snacks, sauces and soups.
However, consumers are now returning to restaurants and former food-ordering habits, which has hit demand for Campbell's products in recent months.
Supply Chain Shortfalls
The company's organic sales were down 2% in the quarter, as it also wrestled with industry-wide supply chain shortfalls and labor shortages.
"Our second quarter was challenging as we lapped a difficult comparison and navigated labor and supply constraints, made even tougher by the Omicron surge," Campbell chief executive Mark Clouse said.
Net sales fell to $2.21 billion (€2.01 billion) in the second quarter ended 30 January, from $2.28 billion (€ 2.07 billion) a year earlier. Analysts on average had expected $2.24 billion (€2.03 billion), according to Refinitiv IBES.
Net earnings attributable to the company fell to $212 million (€192.5 million), or 70 cents per share, from $245 million (€222.4 million), or 80 cents per share, a year earlier.
The company's Meals & Beverages division saw net sales drop by 3% during the quarter, while operating operating income decreased 19%, primarily driven by sales volume declines and lower gross margin performance.
Net sales in the Snacks unit, both reported and organic, decreased 3% while sales of power brands grew by 1%.
Operating income decreased 14% and the company attributed it to sales volume declines and increased administrative expenses.
The company expects full-year fiscal 2022 net sales, adjusted EBIT and adjusted EPS performance to be consistent with its guidance provided in December of last year.