By Savyata Mishra
(Reuters) -Campbell Soup edged past market estimates for quarterly sales and profit on Wednesday and stuck to its annual forecasts, helped by higher prices and steady demand for its branded, ready-to-eat meals and cookies, sending its shares up 2% in early trade.
Prices across Campbell's products rose 1%, while overall volumes dipped 2% during the reported quarter, a trend seen across peers like Kraft Heinz (NASDAQ:KHC) and Mondelez (NASDAQ:MDLZ).
"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 prepare stretchable meals and make smaller and fewer shopping trips, Clouse added.
Still, Campbell said the sales growth rate was tracking the lower end of its full-year net sales forecast range, as it remained cautious on a recovery in consumer spending in the second half.
"We see encouraging consumption trends with key brands like Lance and Goldfish crackers, which could support an acceleration in the back half," Stephens' analyst Jim Salera said in a note.
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.
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.
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.