TLDR
- Campbell’s Q2 adjusted EPS came in at 51 cents, falling short of the 57-cent consensus forecast
- Revenue declined 4.5% to $2.56 billion year-over-year, missing the $2.61 billion target
- The snacks division saw revenue plunge 6.2% to $914 million — the first sub-$1 billion quarter in four years
- Annual adjusted EPS forecast slashed to $2.15–$2.25 from the previous $2.40–$2.55 range
- Shares have plummeted more than 40% over the trailing 12 months, threatening S&P 500 inclusion
Campbell’s delivered another disappointing earnings report, and investors responded swiftly. Shares tumbled 5.4% during premarket hours Wednesday, heading toward their lowest level since August 2003.
The iconic food company recorded adjusted earnings of 51 cents per share during its fiscal Q2, falling short of Wall Street’s 57-cent expectation. Revenue totaled $2.56 billion, representing a 4.5% year-over-year decline and missing the anticipated $2.61 billion mark.
This marked consecutive quarters of declining revenue and the company’s first earnings shortfall since the fourth quarter of fiscal 2023.
Weakness appeared across Campbell’s core business segments. The snacks division — featuring brands like Goldfish crackers, Snyder’s pretzels, Cape Cod potato chips, and Pepperidge Farm products — declined 6.2% to $914 million. This represents the division’s first quarterly performance under $1 billion since 2021.
The meals and beverages unit, encompassing Campbell’s traditional soup products along with Prego and V8, decreased 3.7% to $1.65 billion. While Rao’s premium sauces showed positive momentum, it wasn’t sufficient to counterbalance broader category declines.
Net income dropped 16.2% to $145 million during the quarter.
CEO Mick Beekhuizen addressed the challenging performance. “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
The company revised its full-year organic net sales projection to a 1%–2% decline, compared with the previous forecast ranging from a 1% decrease to a 1% increase. Adjusted EPS guidance was substantially reduced to $2.15–$2.25 from the earlier $2.40–$2.55 estimate.
Management anticipates adjusted earnings will decline 12%–18% in fiscal 2026 versus the prior year, primarily due to tariff impacts on steel and aluminum used in canning operations. Beekhuizen indicated the company would fast-track efficiency initiatives to “stabilize” its struggling snacks business.
Campbell’s has set a goal of achieving $375 million in cost reductions by fiscal 2028.
S&P 500 Membership at Risk
Campbell’s has maintained S&P 500 membership since the index’s 1957 inception — among approximately 50 founding members still included today. However, that long-standing position now faces uncertainty.
The stock has declined more than 40% over the past year, while the S&P 500 has advanced 21.7% during the same timeframe. Campbell’s market capitalization stood at approximately $7.5 billion before the earnings announcement. Following the premarket decline, that valuation dropped to around $6.96 billion — positioning it as the second-smallest company in the index.
Just last Friday, the index committee removed four companies including Match Group and Molina Healthcare from the S&P 500, with all ranking among the smallest index constituents.
Street analysts maintain an average 12-month price target of $28 for CPB shares, roughly 12% above the current trading level near $25.
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