Analyst Note| Erin Lash, CFA |
Coming into wide-moat Campbell Soup’s second-quarter earnings report, the burning question continued to center on which consumer trends adopted since the onset of the pandemic a year ago would prove lasting as social distancing mandates are relaxed with increased vaccine dissemination. Campbell, like its peers, has benefited from consumers staying close to home, with 95% of its sales being derived through the retail channel. And sales again exceeded the low-single-digit crawl that has historically characterized the landscape over a longer horizon, up 5% on an organic basis in its second fiscal quarter, including 10% growth within its core U.S. soup business (about 30% of sales). However, this performance failed to assuage concerns of an impending slowdown, given this was down from the 8% aggregate gains posted in the prior quarter (21% in U.S. soup).