The Camden, New Jersey-based food and snack company said higher costs for ingredients, transportation and labor will result in annual core inflation to be in the high single digits and that those headwinds will be more severe in the second half of the current fiscal year that begins on Aug. 2.
|CPB||CAMPBELL SOUP CO.||43.05||+0.24||+0.56%|
“We expect continued uncertainty around the duration and effects of the pandemic on industry-wide supply chain networks, resulting in accelerating inflationary pressures and a constrained labor market,” CFO Mick Beekhuizen said on the company’s quarterly earnings call on Wednesday.
As a result, the company forecast adjusted earnings for fiscal year 2022 between $2.75 and $2.85 per share, below the $2.87 that analysts surveyed by Refintiv were expecting. Campbell earned an adjusted $2.98 per share during fiscal year 2021.
The company predicted sales would be flat to down 2% in fiscal 2022, worse than the 1% decline that analysts had forecast.
Inflation and other factors had a negative impact of 640 basis points during the fiscal fourth quarter. Slightly more than half of that decline was the result of cost inflation increasing by 5%. The company’s supply chain productivity program partially offset the inflationary headwinds, adding 150 basis points to gross margins.
Campbell Soup reported fourth-quarter sales fell to $1.87 billion from $2.11 billion as the company faced difficult comparisons from last year when consumers stockpiled goods at the height of the pandemic.
Campbell shares were down 14% this year through Tuesday compared with the S&P 500’s 20% gain.