Campbell Soup Company (CPB Quick QuoteCPB - Free Report) has been undertaking strategic pricing actions, which are yielding well. The branded convenience food products company is benefiting from its growing Snacks business. Campbell Soup has been progressing with its cost-saving plan amid rising cost inflation.

Let’s delve deeper.

What’s Working in Campbell Soup’s Favor?

Campbell Soup is benefiting from favorable net price realization and brand strength. In the third quarter of fiscal 2023, the company’s net sales of $2,229 million increased 5% year over year, while organic net sales grew 5%. The upside can be attributed to favorable inflation-induced net price realization. For fiscal 2023, the company expects net sales and organic sales growth of 8.5-10%

The Zacks Rank #3 (Hold) company is gaining on strength in its Snacks business. In the fiscal third quarter, net sales in the company’s snack division rose 12% (also organically) to $1,121 million. The upside can be attributed to sales of the company’s eight power brands, which rose 16%. Sales growth was fueled by a rise in cookies and crackers, specifically Goldfish crackers, Lance sandwich crackers and salty snacks like Kettle Brand potato chips. In-market dollar consumption increased 15% for the overall Snacks business due to power brands. The company expects continued strength in the Snacks business in fiscal 2024.

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Is All Rosey for Campbell Soup?

In the third quarter of fiscal 2023, Campbell Soup’s adjusted gross profit margin contracted 60 basis points (bps) to 30.9% on an unfavorable volume/mix, ongoing cost inflation and increased other supply-chain costs. Adjusted EBIT declined 2% to $313 million due to higher marketing and selling expenses and adjusted administrative expenses.

That said, the company is on track with efforts to counter inflation, such as supply-chain productivity enhancements and margin-improvement efforts. In this regard, management is progressing well with its cost-saving plan. Through the fiscal third quarter, CHD generated $880 million in savings under its multi-year cost-saving program, including Snyder’s-Lance synergies. Management remains on track to deliver savings worth $1 billion by the fiscal 2025-end.

Shares of the company have dropped 18.8% compared with the industry’s 7.7% decline.

Some Top-Ranked Staple Bets

Here, we have highlighted three top-ranked stocks, namely Post Holdings (POST Quick QuotePOST - Free Report) , Utz Brands Inc. (UTZ Quick QuoteUTZ - Free Report) and The J. M. Smucker Company (SJM Quick QuoteSJM - Free Report) .

Post Holdings, a consumer-packaged goods holding company, currently sports a Zacks Rank #1 (Strong Buy). POST has a trailing four-quarter earnings surprise of 59.6% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Post Holdings’ current fiscal year sales and earnings suggests growth of 13.5% and 184.5%, respectively, from the corresponding year-ago reported figures.

Utz Brands, which manufactures a diverse portfolio of salty snacks, has a Zacks Rank #2 (Buy). UTZ’s expected EPS growth rate for three to five years is 10.4%.

The Zacks Consensus Estimate for Utz Brands’ current fiscal year sales suggests growth of 3.7% from the year-ago reported numbers. UTZ has a trailing four-quarter earnings surprise of 12.3% on average.

Celsius Holdings currently carries a Zacks Rank #2. CELH specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements.

The Zacks Consensus Estimate for CELH’s current financial-year sales indicates an 87.6% growth from the year-ago reported figure. The company had an earnings surprise of 100% in the last reported quarter.