TLDR
- Q2 adjusted EPS came in at 51 cents, falling short of Wall Street’s 57-cent estimate
- Revenue declined 4.5% year-over-year to $2.56 billion, missing the $2.61 billion consensus
- The snacks division saw sales plummet 6.2% to $914 million — the first sub-$1 billion quarter in four years
- Management slashed full-year adjusted EPS forecast to $2.15–$2.25 from a prior range of $2.40–$2.55
- Shares have plummeted more than 40% over the trailing year, threatening the company’s S&P 500 inclusion
Campbell’s delivered disappointing quarterly results that sent investors heading for the exits. Shares tumbled 5.4% during premarket hours Wednesday, approaching the company’s weakest price point since August 2003.
The iconic soup maker disclosed fiscal Q2 adjusted earnings of 51 cents per share, falling well below the Street’s 57-cent projection. Revenue totaled $2.56 billion, representing a 4.5% year-over-year contraction and missing analyst forecasts calling for $2.61 billion.
This marked the company’s second consecutive quarter of declining sales, and its first earnings shortfall since the fourth quarter of fiscal 2023.
Weakness spread across Campbell’s core divisions. The snacks segment — which encompasses popular brands like Goldfish crackers, Snyder’s pretzels, Cape Cod potato chips, and Pepperidge Farm products — contracted 6.2% to $914 million. This represents the division’s first quarterly performance below the $1 billion threshold in four years.
The meals and beverages division, featuring Campbell’s traditional soup products along with Prego pasta sauce and V8 beverages, decreased 3.7% to $1.65 billion. While the company saw some positive momentum from its Rao’s sauce brand, the gains weren’t sufficient to counterbalance broader category weakness.
Profit fell 16.2% to $145 million during the quarter.
CEO Mick Beekhuizen addressed the challenges directly. “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,” he stated.
Guidance Cut
Management reduced its full-year organic revenue forecast to a contraction of 1%–2%, versus the company’s earlier projection of a 1% decline to 1% growth. The adjusted EPS outlook was significantly lowered to $2.15–$2.25, compared with the previous guidance range of $2.40–$2.55.
Executives anticipate adjusted earnings to decline 12%–18% in fiscal 2026 versus the prior year, primarily due to tariff impacts on steel and aluminum packaging materials for canned products. Beekhuizen indicated the company would fast-track cost reduction initiatives to “stabilize” the struggling snacks business.
Campbell’s aims to achieve $375 million in total cost savings by fiscal 2028.
S&P 500 Membership at Risk
Campbell’s has held S&P 500 membership since the index’s inception in 1957 — making it one of approximately 50 founding members that remain today. However, that long-standing position now faces uncertainty.
Shares have collapsed more than 40% during the past year, while the broader S&P 500 has surged 21.7% over the identical timeframe. The company’s market capitalization stood near $7.5 billion before the earnings announcement. Following the premarket decline, that valuation was poised to drop to approximately $6.96 billion — making it the second-smallest constituent in the index.
Just last Friday, the index removed four companies including Match Group and Molina Healthcare, all of which ranked among the smallest members.
Analyst consensus calls for a 12-month price target of $28 per share for CPB, representing roughly 12% upside from current levels around $25.
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