Campbell Soup stock sinks after profit and sales fall more than expected as inflation, supply chain costs weigh

Shares of Campbell Soup Co.
CPB,
-0.69%

sank 7.7% in premarket trading Wednesday, after the soups, snacks and simple meals company reported fiscal third-quarter profit and sales that fell more than expected and cut its full-year outlook, as inflation and rising supply chain costs weighed on results. Net income for the quarter to May 2 declined to $160 million, or 52 cents a share, from $168 million, or 55 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share fell to 57 cents from 83 cents, below the FactSet consensus of 66 cents. Sales declined 11% to $1.984 billion, shy of the FactSet consensus of $1.998 billion. Meals and beverages sales fell 14% to $1.04 billion, matching the FactSet consensus, while snacks sales dropped 8% to $945 million to miss expectations of $964 million. Gross margin decreased to 31.7% from 34.5%. For fiscal 2021, the company cut its adjusted EPS guidance range to $2.90 to $2.93 from $3.03 to $3.11 and its revenue growth outlook to negative 3.5% to negative 3.0% from negative 3.5% to negative 2.5%. “Our results were impacted by a rising inflationary environment, short-term increases in supply chain costs, and some executional pressures as we continued to advance our transformation agenda, primarily in our Snacks division,” said Chief Executive Mark Clouse. “We are confident that these are all addressable, and we are taking appropriate actions, including putting pricing in place for the next fiscal year.” The stock has gained 1.6% year to date through Tuesday, while the SPDR Consumer Staples Select Sector ETF
XLP,
-0.84%

has tacked on 5.0% and the S&P 500
SPX,
0.02%

has advanced 12.5%.