Campbell is facing a challening quarter
The soup producer had to reduce its production output due to the US winter storms.
Campbell Soup (NYSE: CPB) Co said Wednesday that it expects sales in the current quarter to come under pressure due to disruptions in the supply chain caused by a major winter storm and deep freeze that engulfed several US states . The soup and snacks maker, which benefited from increased demand for its ready-made meals or quick meals during the pandemic, announced that its plant in Texas, where it makes prego pasta sauces, was closed for two weeks in December. An increasing number of COVID-19 cases also resulted in the plant having to operate fewer staff during winter, a key period for the soup maker when consumers seek comfort food. "We have exceeded the double-digit number of absenteeism, which is truly the highest value we have ever seen," said Chief Executive Officer Mark Clouse to analysts, adding that this resulted in delayed deliveries. "It really took our firepower down a little, as we expected to be able to be ahead of consumption and deliver a little before it." The company forecast a 3.5% to 2.5% decline in sales in fiscal 2021 after demand soared this year as consumers stocked up on soups and snacks ahead of the pandemic-induced closings. Gradual reopening of restaurants and the introduction of vaccines could reduce consumer reliance on packaged food. Ken Goldman, Analyst at J.P. Morgan said the forecast was disappointing for some investors as the home grocery category has generally performed better than expected. Campbell expects adjusted earnings for the year to be between $ 3.03 and $ 3.11 per share, compared to analysts' average estimate of $ 3.03 per share, according to IBES data from Refinitiv. Revenue rose 5.4% to $ 2.28 billion in the second quarter, but was below expectations of $ 2.30 billion. Campbell's shares fell about 2% in early trading.