By Neil J Kanatt
(Reuters) -Campbell’s Co lowered its annual sales and profit forecasts on Wednesday, signaling weak demand for snacks and intense competition from cheaper private-label brands.
The company’s shares fell 4% to $38.76 in early trading after it also missed second-quarter sales estimates.
Consumer packaged food companies such as PepsiCo (NASDAQ: PEP ) and Campbell’s have seen cautious spending from customers, particularly on snacks, after multiple price hikes over the past year.
Campbell’s now expects fiscal 2025 net sales to rise between 6% and 8%, compared with its previous forecast range of 9% to 11% growth.
The revised sales and profit forecast does not reflect any impact from the import tariffs imposed by the U.S. government and potential retaliatory tariffs from other countries, the company said.
"Given the softness in some of our snacking categories, the anticipated sequential top line improvement did not materialize during the quarter, and now we have a more muted second half expectation," Campbell’s CEO Mick Beekhuizen, who took up the role on February 1, said.
Soup produced in the U.S. and imported into Canada will be hit by retaliatory tariffs by Canada, Beekhuizen said in a post-earnings call.
The company, which makes Goldfish crackers, lowered its adjusted profit per share forecast to between $2.95 and $3.05, from a prior expectation of $3.12 to $3.22.
"It’s encouraging that Beekhuizen is ripping off the Band-Aid now rather than waiting for the third quarter... however, this is cold comfort on what should be a red day for the stock," J.P.Morgan analyst Ken Goldman said.
For the quarter ended January 26, Campbell’s net sales rose 9% to $2.69 billion, compared with the average analyst estimate of $2.74 billion, according to data compiled by LSEG.
On an adjusted basis, it earned 74 cents per share, compared with an estimate of 72 cents.