Campbell Soup Co. on Thursday forecast first-quarter revenue largely above market estimates due to pandemic-buying, but said it expects sales to drop off in the second-half of its fiscal year as people start dining out again.
The packaged food industry has seen an unprecedented wave of demand since the start of the COVID-19 pandemic, with people on lockdown stocking their pantries and eating more at home.
At Campbell, for instance, fourth-quarter U.S. soup sales rose 52%, despite having struggled to grow for several years.
But it is unlikely that the company will be able to sustain the sales growth it has seen since the start of March for its Prego pasta sauces and Goldfish crackers.
New Jersey-based Campbell expects lower fiscal second-half sales, but said demand will not entirely revert to pre-COVID levels because the pandemic has put its cookies, potato chips and sauces in the pantries of households that did not previously buy them.
The company's shares fell 7.5% and its comments weighed on other food companies. Shares in General Mills, which is based in Golden Valley and also benefited from a surge of customer demand this spring and summer, fell 2.4%.
"Campbell's results and first-quarter outlook may not show enough upside relative to expectation, leading some investors to posit that these are the best days we can expect from the company," Barclays analyst Andrew Lazar said.
The company forecast current-quarter net sales to rise between 5% and 7%, and adjusted profit to be between 88 cents and 92 cents per share.
Analysts on average expected Campbell to earn 90 cents per share and its net sales to rise 5.2%, according to IBES data from Refinitiv.
Campbell said net sales rose to $2.11 billion in the fourth quarter, ended Aug. 2, from $1.78 billion, a year earlier, beating expectations of $2.08 billion.
Excluding one-time items, Campbell earned 63 cents per share, compared with analysts' expectation of 60 cents per share.