Campbell’s (CPB) Stock Rises 3% After Mixed Q3 Earnings

TLDR

• Campbell’s posted adjusted EPS of 50 cents, beating the 48-cent estimate
• Net sales fell 4% to $2.37 billion, just missing the $2.38 billion forecast
• Snacks net sales dropped 4%, with salty snacks and crackers leading the decline
• Profit rose to $124 million from $66 million a year earlier
• Full-year guidance unchanged: organic sales down 1%-2%, adjusted EPS of $2.15–$2.25

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Campbell’s stock jumped 3.3% in premarket trading Monday after the company posted fiscal third-quarter results that beat on the bottom line but missed on revenue.

Campbell Soup Company, CPB

Adjusted EPS came in at 50 cents, ahead of the 48-cent Wall Street estimate. Net sales fell 4% year-over-year to $2.37 billion, just short of the $2.38 billion analysts had pencilled in.

The stock was already down 22% year-to-date and 37% over the past 12 months heading into the print, so investors were not hard to impress.

Net profit rose to $124 million, or 41 cents a share, compared to $66 million, or 22 cents, in the same quarter a year ago. That improvement came despite the top-line pressure.

The Snacks division remained the weak spot. Net sales in that segment fell 4%, dragged down by declines across salty snacks, crackers, and fresh bakery products.

Snacks has been a problem for several quarters now. Organic snack sales fell 6% in Q2, and the recovery has been slower than management had hoped.

CEO Mick Beekhuizen said results were in line with expectations but that the business remains under pressure from soft sales and margin compression due to inflation. He pointed to early signs of progress in the salty snacks portfolio as a reason for cautious optimism.

Meals and Beverages also saw net sales fall 4%, including a drop in U.S. soup sales. However, Beekhuizen flagged continued strength in at-home cooking trends benefiting brands like Campbell’s, Rao’s, and Swanson.

Snacks Still Struggling

The Snacks unit, home to Goldfish, Snyder’s of Hanover, and Cape Cod, has been weighed down by consumers pulling back on discretionary spending and rising competition from private-label brands.

Campbell’s has responded with plans to increase promotions, consider targeted price cuts, and launch new products. Cost-cutting is also on the table as management looks to “create fuel” to invest behind its strongest opportunities, Beekhuizen said.

The company is also carrying elevated debt from its acquisition of Sovos Brands — the deal that brought Rao’s into the portfolio — and is managing tariff-related cost pressures.

Full-Year Outlook Unchanged

Campbell’s kept its full-year guidance intact. It still expects organic net sales to decline between 1% and 2%, with adjusted EPS in the range of $2.15 to $2.25. The FactSet consensus sits at $2.17.

That guidance was already a cut from the original forecast, trimmed back in March when weak snack demand forced management’s hand.

Rao’s pasta sauce crossed $1 billion in trailing 12-month sales, giving the Meals & Beverages segment a bright spot to point to.

Wall Street remains cautious on the stock. The average 12-month analyst price target is $20, which is slightly below where the stock was trading heading into earnings at around $21.60.

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