Campbell’s profit slump deepens on weak soup demand
Adjusted earnings per share fell 32% to $0.50 in the latest quarter.
The packaged-foods producer Campbell Soup (CPB) reported a steeper profit decline in its fiscal third quarter as lower soup volumes and higher costs continued to pressure margins. Adjusted earnings per share fell 32% year over year to $0.50.
The quarter marked the third consecutive period of accelerating earnings declines, reflecting persistent softness in U.S. soup sales and broader volume pressures across its snacks portfolio. Organic net sales declined 4% from the prior year, matching the pace of the previous quarter but worsening from a 1% decline in the same period a year earlier.
Revenue totaled $2.4 billion, down 4% year over year, while adjusted earnings before interest and taxes fell 24% to $274 million. Gross profit margin compressed 190 basis points to 27.5%, driven by cost inflation, supply chain expenses including tariffs, and unfavorable volume and product mix.
The company’s Meals & Beverages segment saw organic sales decline 4%, with U.S. soup revenue falling 8% as both condensed and ready-to-serve varieties weakened. The Snacks division fared no better, posting a 4% organic sales decline as volume and mix deteriorated 6%, led by salty snacks, crackers, and fresh bakery products. Operating earnings in the Snacks unit fell 32%, an improvement from the prior quarter’s 39% drop but still sharply lower than the 10% decline in the first quarter of the fiscal year.
Campbell reaffirmed its full-year guidance, expecting organic net sales to decline 2% to 1% and adjusted earnings per share to fall 26% to 23%. The company raised its cost-savings target to $375 million by fiscal 2028, up from $250 million, with $200 million already achieved as of the latest quarter.
Cash flow from operations declined 4% year to date to $839 million, while corporate expenses fell to $60 million from $226 million in the prior-year period, primarily due to a prior-year impairment charge. The company also disclosed a $0.02 headwind to full-year adjusted earnings from tariffs, which it expects to offset by roughly 60% through mitigation efforts.
Campbell noted that its Rao’s brand surpassed $1 billion in trailing twelve-month sales in the prior quarter, though the momentum did little to offset broader volume pressures. The company also recorded $2 million in costs related to its pending acquisition of a 49% stake in La Regina, expected to close in the second half of the fiscal year.