Neil J Kanatt
2 min read
By Neil J Kanatt
(Reuters) -Prego pasta sauce maker Campbell's Co beat third-quarter sales and profit estimates on Monday, helped by strong demand for canned food and soups as consumers increasingly prefer to eat at home amid an uncertain economy.
Fears of a potential recession and price hikes triggered by the imposition of hefty tariffs have prompted consumers to opt for more affordable products and avoid costly dine-outs.
"Consumers continue to cook at home and focus their spending on products that help them stretch their food budgets," Campbell's CEO Mick Beekhuizen said.
The company maintained its fiscal 2025 net sales growth forecast of 6% to 8%, excluding the impact of tariffs. It projected annual adjusted profit per share to be at the lower end of its prior range of $2.95 to $3.05, owing to weak snacks demand.
Accounting for levies currently in place, however, Campbell's expects a hit of between 3 cents and 5 cents per share.
The company said it was pursuing possible pricing actions while working with suppliers to seek better sourcing and lower product costs to minimize the tariff impact.
Net sales rose 4% to $2.48 billion during the quarter ended April 27, compared with analysts' average estimate of $2.43 billion, according to data compiled by LSEG.
Max Gumport, analyst at BNP Paribas, said Campbell's key growth engines of snacks and Rao's brand are lagging, while cost inflation ramps up and pricing remains difficult to take.
Volumes for the meals and beverages unit rose 7% during the quarter, while the snacks business reported a 5% fall.
The company's adjusted per-share profit of 73 cents also surpassed the estimate of 66 cents.
Its shares, which have fallen about 18% so far this year, were up about 1% in early trading.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shilpi Majumdar)
