Campbell Soup CEO says June pantry sales are unusually high, despite reopening economy

Consumers continue to stock up on pantry products, despite the fact that the states are focused on reopening their economies, Campbell Soup CEO Mark Clouse told CNBC’s Jim Cramer Monday.

Campbell’s saw sales spike more than 50% during the worst of the coronavirus pandemic and sales across the board, including in its Pepperidge Farms and Snyder’s of Hanover categories, have remained elevated in June, according to IRI data.

“If you go deeper down that list, you’re going to see some soup numbers that are right around 20% and that is the first week of June, traditionally, perhaps, not the time where you’re seeing that kind of growth,” Clouse said in a “Mad Money.”

“I think the reality is that, even though we may be seeing some recovery and people returning to a little bit more normality, I think the behaviors that were built in the last several months have the real potential to continue to provide a catalyst for improved results.”

Campbell saw demand for its various food and snacking products as millions of people across the U.S. were ordered to stay home in efforts to slow the spread of Covid-19, the disease caused by the coronavirus outbreak. As other businesses cut down on ad spending due to the economic downturn, Campbell instead pumped money into marketing as restaurant operations were either shut down or limited and people frequented grocery stores more than usual.

“If the end market slows a bit, the elevated overall demand is going to continue to provide an opportunity for a company like ours,” Clouse explained.

All 50 states have since emerged from lockdown orders that swept the nation in March to combat the deadly disease, though states are at varying stages of reopening. Since reopening efforts began as early as late April, nearly half of the country has reported a rise in new infections in the past week. A number of states, like Texas, are seeing record levels of Covid-19 hospitalizations.

Pantry loading has not quite spiked in regions of the country that are seeing infection rates tick up, but Campbell is getting itself in position, should demand increase for its pantry products again, Clouse explained.

“I think, for us, we are trying to appropriately gauge how demand is ebbing and flowing, but if we’re going to err we want to try to err on the side of having availability,” he said. “Although we haven’t seen a dramatic shift back into that early pantry loading, we are trying to do the best we can to be ready for whatever may unfold here in the next couple months.”

Shares of Campbell Soup rose 2.78% to $48.38 in Monday’s session.

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