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Campbell's Is Enjoying a Lift to Sales and Profits

By Demitri Kalogeropoulos - Apr 20, 2020 at 1:42PM

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But the bounce might only be temporary.

Demand has taken a turn higher at The Campbell Soup Company (CPB -0.30%) in recent weeks. The prepared food specialist said in a filing with the Securities and Exchange Commission on Monday that its business has been on the upswing since COVID-19 fears began reorganizing shopper priorities and forcing more at-home time.

Sales have jumped at its retailing and supermarket partners in recent weeks, and that increase has more than offset the decline Campbell is seeing from its restaurant customers. "We are currently experiencing significantly higher sales for our retail products in both our meals and beverages and snacks segments," executives said in the report. So far its supply chain has held up and, while costs have jumped in a few areas, overall profitability is increasing, thanks to the higher demand and a shift toward more profitable food products.

A woman serves out a portion of soup.

Image source: Getty Images.

Campbell's management said the lift will likely slow, or even reverse itself, over the coming months as stay-at-home orders are relaxed. Yet it appears investors are likely to see at least one quarter of significantly faster sales growth than the 1% increase the company reported back in early March.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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