The Campbell’s Company (NASDAQ:CPB) shares fell Wednesday after the packaged-food maker cut its full-year profit outlook, citing tariff pressures and rising supply chain costs that weighed on quarterly performance.
The company said it is relying on cost-saving measures to offset those headwinds. However, weaker snack demand and shipment disruptions continued to pressure results.
Earnings Miss Expectations
Campbell’s reported second-quarter adjusted earnings of 51 cents per share, missing the analyst consensus estimate of 57 cents. Quarterly sales came in at $2.564 billion, below the Street’s forecast of $2.610 billion.
Net sales declined 5% to about $2.6 billion, while organic net sales fell 3%.
Segment Performance Shows Broad Weakness
In the Meals & Beverages segment, net sales declined 4%. Excluding the impact of the noosa divestiture, organic net sales slipped 2%, mainly due to weaker demand for U.S. soup, Prego pasta sauces, foodservice products, and V8 beverages.
The Snacks segment also struggled. Net sales fell 6% on both a reported and organic basis, primarily due to declines in chips and pretzels. The company also cited supply constraints tied to fresh bakery products, third-party partner brands, and contract manufacturing.
Margins Hit by Inflation and Tariffs
Profitability also deteriorated during the quarter. Adjusted EBIT declined 24% to $282 million. Meanwhile, the adjusted gross profit margin dropped 270 basis points to 27.7%.
The company attributed the margin pressure to cost inflation, higher supply chain expenses, the gross impact of tariffs, and unfavorable volume and product mix.
“Our core Meals & Beverages portfolio delivered in-market consumption growth in the second quarter, highlighted by the Rao’s brand surpassing $1 billion in trailing twelve-month net sales. Overall results, however, fell short of our expectations due to weaker-than-expected performance in Snacks and storm-related shipment disruptions,” said Mick Beekhuizen, Campbell’s Chief Executive Officer. “To stabilize Snacks, we are taking decisive action, focused on sharpening our value, new product innovation, and in-market execution.”
Cost Savings Efforts Continue
Campbell’s said it delivered about $20 million in savings during the quarter. That brings total cost savings to $180 million as part of its fiscal 2028 target of $375 million.
The company plans to use those savings as one lever to help offset tariff-related pressures.
Campbell’s ended the quarter with $561 million in cash and cash equivalents.
Outlook Cut for Fiscal 2026
“Given our first half results and the current operating environment, we are lowering our full-year outlook to reflect a more cautious view for the balance of the year,” Beekhuizen said.
Looking ahead, Campbell’s lowered its fiscal 2026 adjusted earnings guidance to a range of $2.15 to $2.25 per share. The company had previously forecast $2.40 to $2.55 per share.
The revised outlook also fell below the analyst consensus estimate of $2.42.
CPB Price Action: The Campbell’s shares were down 8.67% at $22.54 at the time of publication on Wednesday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
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