The Campbell’s Co 25Q4 Update

The Campbell’s Company (CPB) reported 25Q4 diluted GAAP EPS of $0.48, compared with last year’s loss of $0.01 and my estimate of $0.53.  The shortfall was due mostly to lower than expected net sales, as sales volumes declined by mid-single digits across both the Meals & Beverages (M&B) and Snacks business.  Non-GAAP EPS of $0.63 was even with the prior year, but below my estimate of $0.66.  Net sales were $2.32 billion, up 1.2%, as the extra week in 25Q4, more than offset declines to due to divestures and lower volumes across both businesses.

The results slightly exceeded management’s expectations in a dynamic operating environment characterized by cautious consumers who remain intentional in their spending.  Management believes that M&B is positioned to benefit from consumers who are cooking more at home.  Swanson Broths achieved a 7% increase in dollar consumption.  Italian sauces posted a 2% increase in volume and 4% in dollar consumption, due to gains in sales of Rao’s.  Sales of condensed soups were flat, but ready-to-serve suffered a 6% decline in dollar consumption, as the discontinuation of the Well Yes! brand more than offset small gains across the remainder of the product line.

Snacking saw sequential improvement in sales despite continuing competitive pressure, as consumers have tightened spending.  In 25Q4, sales volume declined 5% and dollar consumption 2%.  Pretzels, chips and crackers lost market share, but fresh bakery held and cookies gained from the launch of White Chocolate Milano.

Management’s guidance anticipate flat organic sales and a 12%-18% decline in adjusted EPS (to a range of $2.40-$2.55), due to the impact of tariffs and stepped-up marketing and promotional activity to protect market share.  My projections anticipate fiscal 2026 GAAP EPS of $2.20 (down from $2.51 previously) and non-GAAP adjusted EPS of $2.53 (down from $2.95).  For fiscal 2027, I project GAAP EPS of $2.43 and non-GAAP EPS of $2.75.

Despite disappointing guidance, Campbell’s stock rose sharply after earnings, lifting its performance since my last report (6/15) to a 3.8% gain, below the S&P 500’s 8.4% advance but better than the Dow Jones U.S. Food Products Index’s 2.0% price decline.  Even so, with the reduced earnings outlook, I am lowering my 12-month price target again from $40 to $37.  The revised price target equates to one-year forward multiples of 15.2 times projected fiscal 2027 GAAP earnings of $2.43 and 13.6 times non-GAAP earnings of $2.75 and equates to a potential total return of 13.6%, including its 4.8% dividend yield.  Thus, I am lowering my performance rating a notch from  “1” (Buy) to “2” (Outperform).

Campbell’s turnaround strategy relies in part on product innovation, which has not been profitable for the company over the past 20 years, as evidenced most recently by the discontinuation of Well Yes!.  Product line extensions (including limited time offers) can be successful, but it is difficult to get consumers to change their buying habits for new product categories and product lines.  For those, acquisitions (at the right price) seem to work best.

This is a summary of my recent update report on The Campbell’s Company (CPB), To obtain a copy of the report, please reach out to me using the contact information provided below.

September 19, 2025 (Report published on September 7, 2025.)

Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250
admin@larkresearch.com

© 2015-2026 by Stephen P. Percoco, Lark Research.   All rights reserved.

This blog post (as with all posts on this website) represents the opinion of Lark Research based upon its own independent research and supporting information obtained from various sources. Although Lark Research believes these sources to be reliable, it has not independently confirmed their accuracy. Consequently, this blog post may contain errors and omissions. Furthermore, this blog post is a summary of a recent report published on this subject and that report provides a more complete discussion and assessment of the risks and opportunities of any investment securities discussed herein. No representation or warranty is expressed or implied by the publication of this blog post. This blog post is for informational purposes only and shall not be construed as investment advice that meets the specific needs of any investor. Investors should, in consultation with their financial advisers, determine the suitability of the post’s recommendations, if any, to their own specific circumstances. Lark Research is not registered as an investment adviser with the Securities and Exchange Commission, pursuant to exemptions provided in the Investment Company Act of 1940. This blog post remains the property of Lark Research and may not be reproduced, copied or similarly disseminated, in whole or in part, without its prior written consent.