The Campbell’s Company (NASDAQ:CPB) shares are trading higher in Wednesday’s premarket session, despite a mixed fourth-quarter report. The iconic canned soup and snack company slightly missed revenue expectations but surpassed earnings per share estimates.
The company reported fourth-quarter sales growth of 1% year-over-year (Y/Y) to $2.32 billion, slightly missing the analyst consensus estimate of $2.33 billion.
The additional week in the quarter contributed 7% to the net sales. Organic net sales fell 3% Y/Y to $2.2 billion, owing to lower volume/mix (-4% Y/Y).
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Meals & Beverages net sales in the quarter remained flat Y/Y. Excluding the impact of the additional week in the quarter and the noosa divestiture, organic net sales were down 3% due to a decline in Rao’s pasta sauces and U.S. soup.
Adjusted gross profit margin decreased 90 basis points to 30.5% due to cost inflation and other supply chain costs.
Adjusted EBIT was down 2% Y/Y to $321 million due to a decline in adjusted gross profit and increased adjusted marketing and selling expenses.
Adjusted EPS of 62 cents beat the consensus estimate of 56 cents.
The company held $132 million in cash and equivalents as of August 3, 2025. Operating cash flow for the year totaled $1.1 billion.
The company has paid $459 million in cash dividends and repurchased around $62 million in common stock in the year.
As of August 3, 2025, Campbell had around $198 million remaining under its anti-dilutive share repurchase program. It also had about $301 million remaining under its September 2021 strategic share repurchase program.
As of the end of the fourth quarter, the company delivered about $145 million of savings under the $250 million cost savings program announced in September 2024.
The company has increased its cost savings goal by 50%, raising the target from $250 million to $375 million by fiscal 2028.
Campbell’s CEO Mick Beekhuizen said, “Meals & Beverages benefited from the continued strong in-market performance of our leadership brands, outpacing category growth as consumers continued to cook at home.”
“We are pleased with Rao’s post-acquisition momentum as it approaches becoming our fourth $1 billion brand, alongside Campbell’s, Goldfish and Pepperidge Farm. While our Snacks business weathered category softness, we delivered a modest sequential improvement to net sales and in-market consumption in the fourth quarter.”
“We’re increasing productivity and accelerating cost savings initiatives to help mitigate core inflation and tariff headwinds,” Beekhuizen added.
Outlook
Campbell expects full-year sales between $10.035 billion and $10.240 billion, representing a decline of 2% to flat growth. The company projects adjusted EBIT to fall 9% to 13%, with adjusted earnings per share forecast in the range of $2.40 to $2.55.
Campbell noted that roughly two-thirds of the year-over-year decline in its fiscal 2026 adjusted EPS guidance, at the midpoint of the range, stems from the estimated net tariff impact.
Gross tariffs are expected to equal about 4% of the cost of products sold, though the company said it has measures in place to offset approximately 60% of that burden during fiscal 2026.
The remaining one-third of the decline reflects year-over-year changes in the base business, including topline trends, a step-up in marketing and selling investment to 9%–10% of net sales, and the normalization of certain fiscal 2025 benefits, such as a return to targeted payout levels for incentive compensation.
At the same time, the company continues to navigate a dynamic operating and regulatory environment, with substantial input cost pressures, primarily tied to tariffs, dampening its earnings outlook despite mitigation efforts.
Campbell emphasized, however, that it expects to advance toward sustainable growth in fiscal 2026 while offsetting some of these near-term cost headwinds.
Investors can gain exposure to the stock via SHL Telemedicine Ltd VanEck Morningstar Wide Moat Value ETF (BATS:MVAL) and VictoryShares Hedged Equity Income ETF (NASDAQ:HEJD).
Price Action: CPB shares are trading higher by 2.61% to $32.28 premarket at last check Wednesday.
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