CAMDEN, NJ. — Early results for the Sovos Brands, Inc. acquisition pleased Campbell Soup Co. executives. They raised the company’s fiscal-year outlook for sales and adjusted earnings after Sovos boosted financial results in the third quarter ended April 28.

Net earnings of $133 million, equal to 45¢ per share on the common stock, were down 17% from $160 million, or 54¢ per share, in the previous year’s third quarter. Net sales of $2.37 billion were up 6% from $2.23 billion, driven by the Sovos Brand acquisition. Organic sales were flat. While sales in Campbell Soup’s Meals and Beverages business, behind the Sovos Brands boost, increased 15%, sales fell 2% in the Snacks business.

“The integration of the Sovos Brands is off to a fantastic start and has already added significant incremental growth to our company in the third quarter,” said Mark Clouse, president and chief executive officer for Campbell Soup, in a June 5 earnings call.

Campbell Soup completed its acquisition of Sovos Brands, which includes the brands Rao’s, Michael Angelo’s and noosa, for about $2.7 billion in March.

“As Campbell’s FQ3 sales see positive growth driven by their recent purchase of Sovos Brands, our experts describe the acquisition as a very smart move by Campbell and will be a much-needed positive contributor to the meals portfolio as canned foods in particular continues to be a tough and challenging category to see growth in,” said John Oh, an analyst at global research firm Third Bridge, on June 5. “As well, our experts continue to signal a cautionary environment for packaged foods volume growth and expect to see continued investments in promotions throughout the industry especially in highly competitive categories such as snacks."

In Campbell Soup’s fiscal-year outlook, net sales are expected to increase 3% to 4%, which compares with previous guidance of down 0.5% to up 1.5%. Adjusted earnings before interest and taxes are expected to increase 6.5% to 7%, up from a previous range of 3% to 5%. Campbell Soup expects adjusted earnings per share in the fiscal year to increase 2% to 3%, down from a previous range of 3% to 5%. Organic net sales are expected to range between down 1% to even, which compares with a previous range of 0% to up 2%.

In Meals and Beverages, net sales in the third quarter increased to $1.27 billion from $1.11 billion. Organic net sales were comparable to the previous year’s third quarter as lower net sales of US retail products offset gains in foodservice. Within US retail products, gains in Prego pasta sauces and US Soup partially offset lower net sales in beverages, Campbell’s pasta and Swanson canned poultry.

US Soup sales increased 2%, primarily due to an increase in broth. In the 13 weeks ended April 28, Campbell Soup gained 2.6 percentage points in market share in the total broth/stock category, according to Circana, a Chicago-based market research firm.

“We had an improvement in share on soup during the quarter, fueled by improving trends across most key segments, in particular as consumers continue to focus on stretchable meals,” Clouse said. “The cooking side of the portfolio benefited in the quarter with notable dollar share gains in condensed, cooking and broth.”

Net sales in Snacks decreased to $1.10 billion from $1.12 billion. Excluding the divestiture of the Emerald Nuts business, organic net sales fell 1% driven by declines in third-party partner brands, contract manufacturing, frozen products and fresh bakery. Growth came in cookies and crackers, primarily Goldfish crackers, and salty snacks.

“We are seeing some modest improvement in the snacking segment in the most recent weeks with the expectation of more of a full recovery in the first half of fiscal 2025,” Clouse said.

Over the first nine months of the fiscal year, Campbell Soup companywide had net earnings of $570 million, or $1.91 per share on the common stock, which were down 17% from $689 million, or $2.30 per share, in the same time of the previous year. Net sales of $7.34 billion were up 1% from $7.29 billion. Organic sales were down 1%.