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Campbell Soup Raises Its Outlook After Sales Growth Spikes

By Demitri Kalogeropoulos – Updated Jun 3, 2020 at 4:35PM

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The COVID-19 pandemic boosted demand for comfort food in recent months.

The Campbell Soup Company (CPB 1.51%) is on a hotter growth trajectory. The soup and packaged food specialist raised its 2020 outlook after announcing sharp sales gains over the last few months

Organic sales gains sped up to 17% compared to a 1% uptick in the prior quarter as consumers stocked up on the company's soup and prepared food products. "We experienced unprecedented broad-based demand across our brands," CEO Mark Clouse said in a press release, "as consumers sought food that delivered comfort, quality and value." Campbell Soup also announced improving profitability, which supported a 57% spike in adjusted earnings per share.

A woman smiles while serving soup.

Image source: Getty Images.

Clouse and his team now see sales growth landing as high as 6.5% in fiscal 2020, which ends in late July, compared to the roughly flat result they had predicted before COVID-19. That prediction implies that demand has remained strong into May even if it has slowed from the surge the company enjoyed in April and late March. Campbell Soup's fourth-quarter report in late August will give investors more details to parse as they try to determine whether this new positive momentum will last as the pandemic threat lessens.

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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