UPDATE 2-Campbell Soup beats quarterly estimates on steady demand for quick meals, cookies
(Adds CEO comment from earnings call in paragraphs 4 and 5, updates shares)
March 6 (Reuters) - Campbell Soup edged past market estimates for quarterly sales and profit on Wednesday and stuck to its annual forecasts, helped by steady demand for its branded, ready-to-eat meals and canned soup and cookies.
Prices across Campbell's products rose 1%, while overall volumes dipped 2% during the reported quarter, as holiday promotions encouraged shoppers to indulge in its Goldfish crackers and Pepperidge Farm cookies.
The pace of price increases has slowed from last year's mid-double-digit rise, as most food companies try to limit pricing to cope with subdued demand.
"We had healthy volume and dollar-share gains across key seasonal categories such as condensed cooking soup, broth, Pepperidge Farm cookies and Pepperidge Farm stuffing," CEO Mark Clouse said.
Demand for home-cooked meals remained strong as budget-conscious shoppers try to prepare stretchable meals and make smaller and less frequent shopping trips, Clouse said on a post-earnings call.
Benefits from prior price hikes and easing supply chains helped Campbell's gross profit margin climb 31.6%, from last year’s 30.5%.
Campbell said sales growth rate was tracking the lower end of the full-year net sales forecast range, as it remained cautious on a recovery in consumer spending in the second half.
Net sales in its Meals & Beverages segment - its biggest revenue churner - declined 2%, owing to weaker demand for retail products in the U.S., including ready-to-serve soups as well as Pace Mexican sauces. Sales in the Snacks division were flat in the quarter.
The company, which is set to close its buyout of Rao's sauce maker Sovos Brands next week, posted second-quarter net sales of $2.46 billion, slightly above the average estimate of $2.44 billion, according to LSEG data.
It logged adjusted earnings of 80 cents per share, better than the 77 cents analysts were expecting.
The New Jersey-based firm reaffirmed its fiscal-year 2024 target for net sales and earnings for the second time in a row.
Shares of the company were up 1% in trading before the bell. (Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai)
