Campbell Soup (CPB) Shares Climb 3% Despite Revenue Miss in Q3 Report

Key Takeaways

• Adjusted earnings per share of $0.50 surpassed analyst expectations of $0.48
• Revenue declined 4% year-over-year to $2.37 billion, narrowly missing the $2.38 billion consensus
• Snacks segment revenue dropped 4%, driven by weakness in salty snacks and crackers categories
• Net income increased to $124 million compared to $66 million in the prior-year period
• Company maintains full-year outlook: organic revenue down 1%-2%, adjusted EPS between $2.15-$2.25

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Shares of Campbell Soup surged 3.3% during premarket hours on Monday following the release of fiscal third-quarter earnings that exceeded profit expectations while falling slightly short on the revenue front.

Campbell Soup Company, CPB

The company reported adjusted earnings per share of $0.50, topping the Street’s consensus estimate of $0.48. However, revenue decreased 4% from the year-ago quarter to $2.37 billion, marginally below the anticipated $2.38 billion.

Given that shares had already tumbled 22% year-to-date and 37% over the trailing 12 months prior to the earnings release, the market welcomed even modestly positive news.

Net income climbed to $124 million, equivalent to $0.41 per share, versus $66 million, or $0.22 per share, during the comparable quarter last year. This profitability gain occurred even as the company faced revenue headwinds.

The Snacks business unit continued to be a pressure point. Revenue in this division declined 4%, with weakness spreading across salty snacks, crackers, and fresh bakery offerings.

The snacks portfolio has struggled for multiple quarters. Organic snack revenue dropped 6% in the previous quarter, and the turnaround is progressing more slowly than leadership anticipated.

Chief Executive Mick Beekhuizen noted that performance aligned with internal projections but acknowledged that the company faces ongoing challenges from weak sales and margin pressure stemming from inflation. He highlighted emerging positive signals in the salty snacks business as grounds for measured confidence.

The Meals and Beverages division also experienced a 4% revenue decline, including weakness in domestic soup products. Nevertheless, Beekhuizen emphasized sustained momentum in home cooking trends that are benefiting brands including Campbell’s, Rao’s, and Swanson.

Snacks Portfolio Faces Ongoing Headwinds

The Snacks business, which includes popular brands like Goldfish, Snyder’s of Hanover, and Cape Cod, has been challenged by consumers reducing discretionary purchases and intensifying pressure from store-brand alternatives.

Campbell’s has outlined strategies to boost promotional activity, evaluate selective price reductions, and introduce new product innovations. The company is also pursuing cost reduction initiatives as leadership seeks to “create fuel” for investment in the most promising growth opportunities, according to Beekhuizen.

Additionally, the organization is managing substantial debt stemming from its purchase of Sovos Brands—the transaction that added Rao’s to its portfolio—while simultaneously navigating tariff-driven cost increases.

Annual Guidance Remains Steady

Campbell Soup maintained its full-year financial outlook without modification. The company continues to project organic net revenue will decline 1% to 2%, with adjusted earnings per share landing between $2.15 and $2.25. The FactSet consensus estimate stands at $2.17.

This guidance had already been revised downward from the initial forecast, with adjustments made in March when disappointing snack performance compelled management to reset expectations.

A notable success story emerged from the Rao’s pasta sauce brand, which surpassed $1 billion in trailing 12-month revenue, providing a significant bright spot for the Meals & Beverages segment.

Analyst sentiment toward the stock remains measured. The consensus 12-month price target averages $20, sitting modestly below the pre-earnings trading level of approximately $21.60.

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