Campbell Soup Co raised its annual core sales forecast on Wednesday after topping market estimates for quarterly results, as easing supply-chain issues help it meet robust demand for its soups and sauces.
Shares in the New Jersey-based company, which saw a jump in margins as it increased product prices, rose 3% in premarket trade.
Packaged food makers are seeing the pandemic-driven boom in demand holding strong, while price increases are also boosting their revenue, with firms including Kellogg and Kraft Heinz Co also raising annual forecasts in recent months.
Easing supply snarls and improvement in staffing have helped the company ramp up production and inventory to normal levels following more than a year of pandemic-induced shipping strains and worker shortages.
"Our improved supply chain execution along with inflation-driven pricing began to mitigate the margin pressure we have experienced over the last 12 months," Mark Clouse, chief executive officer, Campbell, said.
Adjusted Gross Margin
The company, known for Swanson broth and Pepperidge Farm cookies, said that its adjusted gross margin increased 90 basis points to 31.5% in the third quarter.
Campbell said it expects fiscal year 2022 organic net sales to rise between 1% and 2%, compared with its prior estimate of a 1% decline to a 1% rise.
The company, however, kept its adjusted profit forecast unchanged at $2.75 to $2.85 per share, saying it expects 'significant inflation'.
Net sales rose 7% to $2.13 billion in the three months to 1 May, beating analysts' average estimate of $2.05 billion, according to Refinitiv IBES data.
Excluding one-time items, the Goldfish crackers maker earned 70 cents per share, topping analyst estimates of 61 cents.