top of page

Campbell’s Earnings: Modest Beat Amid Tariff Headwinds, Eyes on 2026

  • Writer: Hardik Shah
    Hardik Shah
  • 3 minutes ago
  • 3 min read
Campbell's Brands Portfolio
Source: Campbell's earnings presentation

TLDR


  • Revenue Strength: Q4 sales rose 1% (organic -3%), with Meals & Beverages outpacing categories.

  • Margin Trends: Adjusted EBIT -2%, margins pressured by tariffs and inflation despite productivity gains.

  • Forward Outlook: FY26 guidance cut—EPS down 12–18% as tariffs weigh, with brand investment ramping up.


Business Overview


The Campbell’s Company (NASDAQ: CPB), headquartered in Camden, N.J., is a North American food powerhouse with FY25 sales of $10.3B across two divisions: Meals & Beverages and Snacks. Its 16 leadership brands include Campbell’s soups, Swanson, Prego, Rao’s, Goldfish, Pepperidge Farm, Cape Cod, and Snyder’s of Hanover. The portfolio skews toward at-home cooking, soup, sauces, broth, and premium snacking. Channels span U.S. retail, foodservice, e-commerce, and limited international exposure in Canada and Latin America.


Campbell Earnings


Fourth Quarter (Q4 FY25)


  • Net Sales: $2.32B (+1% reported, -3% organic).

  • Gross Margin: 30.5%, down 90 bps from tariffs and inflation, partly offset by productivity gains.

  • EBIT: $269M reported; adjusted EBIT $321M (-2%).

  • EPS: GAAP $0.48 vs. $(0.01) prior year; adjusted EPS $0.62 (-2%).


Full Year (FY25)


  • Net Sales: $10.3B (+6% reported, -1% organic). Sovos Brands acquisition lifted results.

  • EBIT: $1.12B reported; adjusted EBIT $1.49B (+2%).

  • EPS: GAAP $2.01 (+6%); adjusted EPS $2.97 (-4%).

  • Cash Flow: $1.13B from operations.

  • Shareholder Returns: $459M dividends + $62M buybacks.


Forward Guidance (FY26)


  • Net Sales: Organic -1% to +1%.

  • Adjusted EBIT: Down 9–13%.

  • Adjusted EPS: $2.40–$2.55, down 12–18%.

  • Key Assumptions:

    • Tariffs projected at ~4% of cost of goods sold; ~60% mitigated.

    • Increased marketing spend at 9–10% of sales.

    • Cost savings target raised to $375M by FY28.


CEO Mick Beekhuizen noted: “Going into fiscal 2026, we're focused on delivering today while building for tomorrow—with an increased emphasis on delivering topline growth through incremental marketing investments and consumer-led innovation, while accelerating cost savings to help mitigate core inflation and tariff headwinds.”

Operational Performance


Meals & Beverages:

  • Organic net sales -3% in Q4, driven by declines in Rao’s pasta sauces and U.S. soup.

  • Strong broth performance (+7% consumption growth) and innovation like Swanson ramen broth.

  • Rao’s poised to become Campbell’s fourth billion-dollar brand.

Snacks:

  • Q4 organic sales -2%, pressured by Snyder’s pretzels and partner brands.

  • Sequential improvement with Milano white chocolate cookies (+27% consumption) and Goldfish stabilization.

  • Operating earnings flat year over year.


Market Insights


  • Consumers remain cautious and value-seeking, leaning into at-home cooking.

  • Premiumization, flavor innovation, and health/wellness are growth pockets.

  • Competitive promotional intensity pressured soup and snacks, but innovation (Milano, Goldfish LTOs) helped offset.


Consumer Behavior & Sentiment


  • At-home cooking continues as a value strategy.

  • Millennials and boomers drove broth usage growth.

  • Consumers still trade up for premium indulgences—e.g., Milano white chocolate, farmhouse buns.

  • Caution persists in snacking categories, but loyalty to flagship brands like Goldfish and Pepperidge Farm provides resilience.


Strategic Initiatives


  • Innovation: ~3% of FY25 sales from new products; focus on premium and health (e.g., Pacific bone broth, Swanson ramen broth).

  • Portfolio Optimization: Sold Pop Secret (2024) and noosa (2025).

  • M&A: Integration of Sovos Brands driving synergies and growth.

  • Growth Office: New structure for consumer insights, marketing, and revenue management.

  • Digital Transformation: Investments in analytics and agility.


Capital Allocation


  • Dividends: $459M in FY25, +5% YoY increase.

  • Buybacks: $62M repurchased, with ~$500M still authorized.

  • Debt: Net debt/EBITDA at 3.6x, down from 3.7x prior year.

  • Capex: $426M, ~4% of sales, focused on productivity and growth projects.


The Bottom Line


Campbell’s ended FY25 slightly ahead of expectations, with strong Rao’s momentum and innovation balancing weakness in snacks. However, FY26 guidance reflects a steep earnings reset as tariffs, inflation, and divestitures weigh on margins.


Investors should watch:

  1. Tariff Mitigation: Execution on 60% coverage of cost impact.

  2. Snacks Rebound: Goldfish and Milano innovations critical for growth.

  3. Rao’s Scaling: Momentum toward becoming the fourth billion-dollar brand.


Campbell’s remains a brand-rich, cash-generative CPG player, but near-term profitability is under pressure from external headwinds.



--

Stay informed. We break down earnings, trends, and policy shifts shaping consumer staples and adjacent industries — no paywalls, no newsletters, just actionable insights wherever you scroll. Follow us on LinkedIn and X.


bottom of page