By Granth Vanaik and Uday Sampath Kumar
(Reuters) -Campbell Soup Co raised its annual sales and profit forecasts on Wednesday, supported by easing supply-chain issues and steady demand for its soups and meals even as the company raised prices to offset rising costs.
Shares of Campbell rose 3.4% premarket after the New Jersey-based company beat first-quarter estimates.
Packaged food manufacturers in North America have seen relatively little pushback from shoppers despite multiple rounds of price hikes this year, as they turn to cooking more at home.
"Consumers continue to cut back on out-of-home eating and are migrating from more expensive grocery categories as they seek ways to ease the impact of inflation," Chief Executive Officer Mark Clouse said on a call with analysts.
Campbell's Spaghetti Carbonara, which costs about $1.53 per serving, was among its most popular recipes as consumers look for ways to stretch their at-home cooking budgets, Clouse said, but added that the company's condensed soups and broths were losing market share to cheaper store-brand products.
The Prego pasta sauces owner expects fiscal year 2023 net sales to rise 7% to 9%, compared with its previous forecast of a 4% to 6% increase.
Its net sales rose 15% to $2.58 billion in the first quarter, beating estimates of $2.45 billion, according to Refinitiv IBES data.
The company said easing production and shipping challenges helped it get more products to retailers' shelves.
"This quarter demonstrates that packaged food companies are still operating in a highly favorable operating environment. How long will this continue is the million-dollar question," CFRA Research analyst Arun Sundaram said.
Campbell said average selling prices across its meals & beverages, and snacks divisions rose 16% in the first quarter, while overall sales volumes fell about 1%.
The company expects fiscal year 2023 adjusted earnings per share between $2.90 and $3.00, compared with its prior expectations of $2.85 to $2.95.