Campbell Soup revenue misses estimates as demand tapers

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(Reuters) -Campbell Soup Co fell short of market expectations for quarterly revenue on Wednesday, as the packaged food company grappled with supply chain constraints, while demand for its products eased from pandemic highs.

The COVID-19 pandemic has ripped through supply chains of companies across the packaged food industry that has led to higher costs, delayed deliveries and caused a shortage of labor in the United States.

For food companies like Campbell, demand has waned from the peak seen during the pandemic, when consumers stockpiled on frozen meals, snacks and soups at home. Campbell’s organic sales were down 2% in the quarter.

“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 in a statement.

Higher supply expenses caused Campbell’s quarterly gross margin to decline to 30.3% from 34.4% last year.

Campbell also said it expects inflation for the year to be higher than previously anticipated, but maintained its profit forecast that was largely above estimates as it sees supply chain snags to ease through the second half of the year.

The Goldfish crackers maker said it is seeing labor pressures ease heading into the second half of the year, with sustained demand and the benefit from price hikes expected to buttress its profit.

It reaffirmed its full-year adjusted earnings forecast of between $2.75 and $2.85 per share, compared with analysts’ estimate of $2.79, according to Refinitiv IBES.

Campbell’s second-quarter net sales fell to $2.21 billion from $2.28 billion a year earlier, missing expectations of $2.24 billion, while its per-share profit of 69 cents came in line with estimates.