Campbell Soup Co CPB

The biggest point of consternation prior to wide-moat Campbell Soup’s first-quarter print was to what extent recent top-line gains (particularly for its namesake brand) would persist during the colder months on its home turf. By all accounts, Campbell’s performance quelled concerns, with a 21% year-over-year bump in U.S. soup sales. This helped drive an 8% increase in consolidated organic sales, reflecting 6% higher volumes and favorable mix combined with a 2% benefit from lower promotional spend. Admittedly, a portion of these gains were attributed to a rebuild of inventory at leading retailers, essential ahead of the all-important second fiscal quarter. However, management suggested that these gains came with an improving share position in condensed and broth soup, which we think illustrates that efforts to reinvest behind innovation and marketing of its core lineup (which began before the onset of COVID-19) could have some legs.