CAMDEN, NJ. — Gaining share in several sub-categories, the Snacks division of Campbell Soup Co. sustained strong momentum in the company’s first quarter, benefiting from improved supply chain performance.

In a presentation to investment analysts Dec. 7, the company’s executives highlighted the division’s strength, noting strong year-over year growth in its power brands of Goldfish (up 21%), Pepperidge Farm cookies (up 9%), Lance (up 11%), Cape Cod (up 21%), Kettle (up 17%), Late July (up 10%) and Snack Factory Pretzel Crisps (up 9%). Versus sales in the fall of 2019, sales of the power brands were up an average of 30%.

“We had an impressive quarter as our brands rapidly responded to the recovery of supply and increased investment with accelerated top-line growth and share improvement,” Mark A. Clouse, president and chief executive officer, said of the Campbell Soup Snacks business.

He said six of the eight power brands gained share in the first quarter ended Oct. 30, with Cape Cod, Snack Factory and Lance each gaining more than a point of share. The share gains were due in large measure to the lessened supply chain constraints.

“This (strong sales performance) also supports the historical learning that consumer snacking behavior is very resilient and relevant in tough economic environments,” Mr. Clouse said.

First-quarter operating earnings of the Snacks business of Campbell Soup rose 20% to $153 million, up from $128 million the first quarter of fiscal 2022. Net sales of the business rose 15% to $1.12 billion, compared with $970 million a year earlier. Accounting for the 15% increase, Campbell Soup said pricing contributed 18 percentage points to the year-over-year change, slightly offset by a 2-percentage-point decrease in volume/mix and 1 percentage point decrease from promotional spending.

Mr. Clouse highlighted the strength of the Goldfish brand. He said consumers have responded to marketing efforts to broaden the appeal of the brand.

“This is a remarkable growth story for one of our most important brands,” he said. “In fact, for the third time in a row, Goldfish crackers were teens’ most preferred snack brand according to Piper Sandler’s Fall 2022, taking stock with teens survey. Our Goldfish Dunkin’ Pumpkin Spice crackers were the top turning new cracker item and leading pumpkin spice stacking item during the quarter.”

More recently, the company has partnered with Disney Marvel for limited-edition Black Panther: Wakanda Forever Goldfish. He said Goldfish Frank’s RedHot Crackers would make a return in coming months.

The company also is devoting attention to its cookie line, Mr. Clouse said.

 “We’ve introduced new packaging designs across the portfolio from Milano to Chessman and brought back holiday favorites like Linzer cookies,” Mr. Clouse said. “We also have new limited edition Milano Hazelnut Hot Cocoa, and with the return of the Milano Fancy Santa promotion, we hope to do our share in making the holidays a little more special.”

Asked by an analyst whether the company was still on track toward an objective of 17% operating profit margins by 2025 in the Snacks business (versus 13.6% in the just completed quarter), Mr. Clouse voiced guarded optimism.

“I think there’s probably a couple of hundred basis points of just what I would call environmental overhang that I do expect us to be able to improve,” he said. “So, when I think about longer term on the business, I still remain very confident that, that margin objective and goal is in place. I think we just need to see how the environment unfolds to put a better qualification on timing.”

Net earnings attributable to Campbell Soup in the first quarter totaled $436 million, or 99¢ per share, an increase of 16% from $376 million, or 86¢ per share, in the year-ago quarter. 

Net sales in the quarter rose 15% to $2.58 billion, compared with $2.24 billion the previous year. The company said inflation-driven pricing, brand strength and continued supply recovery contributed to the sales growth. There were some volume declines, the company said, partially mitigated by expected retail inventory recovery and a strong rebound in unmeasured channels, especially foodservice.

Gross profit increased 15.5% to $834 million from $722 million in the prior year. As a percent of sales, gross profit margin held steady at 32.4% compared with 32.3% in the first quarter of 2021.

Across the entire company, Mr. Clouse said the recovery in its supply chain “resulted in materially improved service levels, up over 18 points versus the prior year, enabling retailers to replenish inventory in the quarter and be well positioned on supply heading into the critical holiday season.”

Campbell Soup raised its guidance based on first-quarter results. The company is now guiding adjusted EPS of $2.90 to $3 for fiscal 2023, a slight increase from its previous guidance of $2.85 to $2.95. It raised its sales growth guidance to up 7% to 9%, from up 4% to 6%, and its EBIT growth guidance to 2.5% to 6.5%, up from 1% to 5%.

Campbell Soup’s stock price rose more than 6% in mid-day trading on Dec. 7, topping out at $56.24, up from a previous close of $52.99.

Industry analysts appeared impressed by the company’s results, with one rating Campbell Soup as positive, citing a “high quality beat with good GM, supply chain improvements and A&C partly restored.” As food costs continue to pressure consumers, analysts said they expect money-conscious shoppers to turn to the types of snacks and affordable cooking brands that make up the Campbell Soup portfolio.

“Our consumer insights show that consumers continue to cut back on out-of-home eating and are migrating from more expensive grocery categories as they seek ways to ease the impact of inflation,” Mr. Clouse said. “With consumers preparing about 80% of meals from home, our brands are well positioned for sustained growth, delivering consumers the quality, value and convenience they seek for simple at-home meals and quick-scratch cooking.”

First-quarter operating earnings of the Meals and Beverages business rose 18% to $331 million, up from $280 million in the first quarter of fiscal 2022. Net sales of the business rose 15% to $1.46 billion, compared with $1.27 billion a year earlier.  

  US soup net sales grew 11% over the prior year, with gains in ready-to-serve, condensed and broth. Campbell Soup’s total dollar share of US soup declined by less than 1 point, the company said.

“This was the fifth consecutive quarter Chunky held or gained volume share, reflecting the powerful combination of a strong base business, highly relevant innovation and increased investment in compelling advertising,” Mr. Clouse said. “Versus three years ago, Chunky grew dollar consumption by 26%.”

Offering an update on the company’s sustainability efforts, Mick Beekhuizen, chief financial officer and president of Meals & Beverages, said Campbell Soup on Nov. 21 entered into a 12-year renewable power purchase agreement with Enel North America to support the company’s goal to reduce greenhouse gas emissions.