Campbell's Soup 'checks a lot of boxes for consumers' in this economic climate, CEO says

Good old-fashioned affordable canned soup is having a moment as inflation-weary shoppers trade down from bigger meals to save money.

Campbell Soup (CPB) said this week that U.S. soup sales increased by 11% in its most recent quarter on the back of brisk demand for ready-to-serve soups, condensed soups, and broth.

The company's CEO says it's a sign of the times.

"I think in the moment we are in right now, the soup business really matches both the demand for consumers and the value that they are looking for," Campbell Soup CEO Mark Clouse said on Yahoo Finance Live (video above). "And as we have watched consumers navigate through tough inflation and the backdrop of a tougher economic environment, I think soup in many ways checks a lot of boxes for consumers right now."

A customer holds a can of cream of celery Campbell's Soup at a grocery store in Phoenix, Arizona, February 22, 2010.  Campbell's Soup Co has been having a tough time getting its soups from the store shelf to the home pantry. Campbell's U.S. soup sales fell 8 percent during the usually strong late fall and winter months, the company said on Monday. While the economy remains weak, shoppers are being lured by other prepared foods such as frozen dinners, that may be promoted at lower prices.   REUTERS/Joshua Lott (UNITED STATES
 - Tags: BUSINESS)
A customer holds a can of cream of celery Campbell's Soup at a grocery store in Phoenix, Arizona, February 22, 2010. REUTERS/Joshua Lott

Here are some other Yahoo Finance takeaways from Campbell Soup earnings:

  • Big quarter for soup sales ahead of peak winter demand.

  • Supply chain improvements leading to better in-stock positions are a welcome development.

  • The full-year sales and profit guidance raise is an added bonus.

  • Keep an eye on volume trends as CPB works to pass through further inflation.

Campbell Soup stock hit a one-year high in the wake of the results. Year to date, shares are up 30% compared to a 16% drop for the S&P 500.

The Street was generally pleased with Campbell's quarter and outlook.

"After a difficult fiscal 2022, Campbell has noticeably improved its supply chain which is supporting higher shipment growth and better realized productivity (3 percentage points plus)," EvercoreISI analyst David Palmer said in a note to clients. "Improved fulfillment is being supported by higher advertising spend (+30% year over year in fiscal first quarter). These factors plus improved pricing (roughly 11% in fiscal year 2023) relative to commodity inflation (up low double-digit percentage) should support the company’s earnings outlook."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

Click here for the latest trending stock tickers of the Yahoo Finance platform

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube