Campbell Soup Co. ’s pandemic boost came to an end, as some customers are returning to restaurants and offices, while higher costs cut into profits.
The soup maker is the latest example of how inflationary pressures are hampering profits for food manufacturers, which are struggling to maintain sales momentum as more people are vaccinated against Covid-19 and the U.S. economy reopens. Campbell and others are raising prices to compensate for higher transportation, commodity and labor costs.
“We expected this to be a challenging quarter, but it was made even tougher as these pressures in some cases were more significant than anticipated,” Chief Executive Officer Mark Clouse said on a conference call.
Campbell’s shares dropped 8% Wednesday morning to $45.24. Through Tuesday’s market close, shares were up 1.6% year to date. Stocks for rivals such as General Mills Inc., Kellogg Co. and Kraft Heinz Co. were also down slightly Wednesday.
Mr. Clouse said he expects higher costs to continue to squeeze Campbell’s profit margin in coming months.