It wasn’t too long ago when whole aisles of grocery stores would be completely empty, devoid of basic household necessities like paper towels, disinfectant and even canned soup. But now, according to Campbell’s Soup, people are beginning to stockpile less and less.
The company became aware of the change in trends when it came short of quarterly expectations on Wednesday. When the pandemic was at one of its peaks, restaurants and food vendors had to shut their doors. As a result, consumers turned to pre-packaged meals to fill their pantries and freezers. Now that the mask mandate has regressed, restaurants have returned to full capacity. So, Americans don’t feel the need to have quite so many sauces, soups and broths at their disposal.
According to Campbell’s most recent market report, the company saw 2 percent less in sales this quarter. Net sales from the second quarter, which ended Jan. 30, fell from last year’s $2.28 billion to this year’s $2.21 billion. This was $30 million less than analysts expected for the company’s second quarter. Unfortunately, at the same time, they are also struggling with nationwide supply chain backup and labor shortages. Additionally, net earnings attributable to the company fell from $245 million, or 80 cents per share, in 2021 to $212 million, or 70 cents per share, in 2022.
So, while the stockpile decline means good news for public health, it may also mean hard times for Campbell’s.
“Our second quarter was challenging as we lapped a difficult comparison and navigated labor and supply constraints, made even tougher by the Omicron surge,” Campbell’s Chief Executive Mark Clouse said, according to New York Post.
Campbell’s Soup Sees Silver Lining to End in Stockpile Trend
Despite the hardships that Campbell’s is experiencing, the overall numbers from this past year point to better times.
The New Jersey-based company has been able to maintain and exceed full-year profit targets. Consequently, shares have risen as much as 4 percent to $43.98. Clouse predicted gross margins, too, have also begun to recover, as the company hired 3,500 new workers in the last seven months.
There are still quite a few obstacles for Campbell’s Soup to manage at the moment, but with the mixed news comes new hope for the future.
“We now see absenteeism and vacancy rates trending back to normal levels. This is translating to more production and the beginning of a return to normal distribution and inventory levels,” he said.
Hopefully, the bit of normalcy in the grocery market will resolve some of the supply chain issues companies like Campbell’s are experiencing and help us return to pre-pandemic conditions while browsing the aisles at the grocery store.