Campbell Needs to Strike While Soup Is Still Hot

Increased use for cooking apparently is boosting demand for Campbell’s soups during the pandemic.


Ross D. Franklin/Associated Press

Campbell Soup

CPB -2.03%

is back, led by an unlikely champion—its original condensed soups. Now it needs to show it can make those gains stick.

The company reported solid results Wednesday. Its net sales rose 7% from a year earlier in the three months to Nov. 1, while adjusted earnings before interest and taxes jumped 18%. U.S. soup sales rose 21% in the quarter. Granted, that is down from 52% growth in the prior quarter, but that was during the summer months. The substantial rise seen in the fall bodes well for peak soup season this winter.

Chief Executive

Mark Clouse,

who took over in January 2019, has often stressed the need to update the soup lineup for contemporary tastes, such as with bone broths and plant-based offerings. So it was somewhat surprising to hear him say Wednesday that Campbell’s stodgy condensed soups were “the hero” in the latest quarter.

This was apparently due to increased use for cooking. Families stuck at home during the pandemic are looking for quick and affordable ways to put dinner on the table. Views of Campbell’s website recipes were up 20% from a year earlier in the quarter, Mr. Clouse said. Millennials showed the biggest increase in purchases and repeat purchases of any demographic, he added.

Campbell shares, nonetheless, were down 2% Wednesday. Investors might have been disappointed with the company’s guidance for the current quarter of 5% to 7% net sales growth and the same pace in adjusted Ebit. This suggests last quarter’s margin expansion won’t be repeated. But executives said this was partly due to increased marketing planned for the crucial winter quarter.

Making that investment now is the right call as rising Covid-19 cases and activity restrictions set the stage for a difficult homebound winter. Campbell will never get a better opportunity to reset its namesake business.

Will the coronavirus pandemic lead to long-term changes in how we shop for food? To better understand the challenges facing grocery stores, WSJ’s Alexander Hotz spoke with an industry insider, a store owner and a Walmart executive.

Write to Aaron Back at

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the December 10, 2020, print edition as ‘Campbell Needs to Strike While Soup Is Still Hot.’

Source link

What do you think?

Written by Chekmagazine


Leave a Reply

Your email address will not be published. Required fields are marked *



Photos: Sheikh Mohammed bin Rashid Al Maktoum tours GITEX 2020

Surprise billing talks die down after provider lobbying offensive