CAMDEN, NJ. — While Campbell Soup Co. remains confident its Snacks business will deliver “outsized growth” over time, the category is likely to feel pressure over the short term, said Mark A. Clouse, president and chief executive officer.

Clouse spoke about the company’s pricing strategy for its cookies and other snacks in a call with investment analysts June 5. He said his optimism was fueled by the performance of two snack brands in the Campbell Soup portfolio — Late July and Pepperidge Farm cookies. Demand for other categories, including frozen products and fresh bread, was soft.

Operating earnings in Snacks in the third quarter ended April 28 decreased 7% to $167 million from $179 million in the same period a year earlier. Gross profit margins tightened due to higher cost inflation and other supply chain costs and unfavorable volume/mix, which was offset partially by supply chain productivity improvements and the benefit of cost-savings initiatives.

Net sales in Snacks decreased to $1.10 billion from $1.12 billion in the previous year’s third quarter. 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.

“I anticipate some continued pressure in the short term,” Clouse said. “We expect Snacks will recover over the next couple quarters and are confident in our overall expectation for outsized growth in snacking over the longer term. In fact, a couple of standouts in the third quarter were Late July and Pepperidge Farm cookies, fueled by innovation and great marketing.”

Clouse cited the addition of Scorchin’ Sauce and Hawaiian Habanero chips during the quarter.

“Late July net sales in the quarter increased 26% compared to prior year as the brand displays remarkable momentum supported by our great new product development, brand investment and execution,” he said. “On the sweeter side, we continue to drive strong levels of velocity in cookies with new innovations in our Pepperidge Farm Milano cookie portfolio, such as the launch of our London Fog limited time offering. Most importantly, our Pepperidge Farm cookies portfolio continues to grow buyers across all generations, a positive proof point that as consumers are more selective on how they spend their snacking dollars, our elevated brands are well positioned to win.”

Across its entire Snacks portfolio, temptation to boost sales by sharply cutting prices should be resisted, Clouse cautioned.

“Now, I do think given our categories and brands, we’re not going to win this fight in the longer term by taking price down dramatically or going to promoted levels that are not sustainable,” he said. “That’s not going to be the right playbook for more elevated brands, and I think a great example of that is right now in cookies, which is a tough category where we are seeing a fair amount of trading down into private label.

“The good news is our Pepperidge Farm business is really kind of holding its own, not by dealing the price points, but by continuing to bring added value.”

Clouse said the Snacks business is dealing with moderate category pressure, especially among lower-income and middle-income consumers.

“However, we’ve seen improvement in the latest weeks and remain very confident in the continued consumer demand for snacking and the strength of our portfolio of advantaged brands,” he said.

A different approach may be required in salty snacks, Clouse said.

“One of the places we’re seeing a lot of competition is in kettle potato chips, which has been an extremely successful segment and continues to be, but we’re also seeing a lot more competition there,” he said. “And so, we’re going to want to make sure that we get the balance right.”

Promotion and marketing investments will be balanced during the quarter, Clouse said.

“The net of it, I think will be a pretty healthy investment, nothing that is out of the realm of history relative to promotion,” he said.

Campbell Soup in the fourth quarter will invest in promotions and marketing for Kettle potato chips, a brand seeing increased competition, he said.

Companywide, Camden-based Campbell Soup had net earnings of $133 million, equal to 45¢ per share on the common stock, which was 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 Brands, Inc. acquisition completed in March. Organic sales were flat.

In Meals and Beverages, net sales in the third quarter increased 15% 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.

Operating earnings in Meals and Beverages increased 26% to $229 million from $182 million, primarily driven by the Sovos Brand acquisition, higher gross profit, and lower marketing and selling expenses in the base business.