TLDR
- Campbell’s delivered adjusted earnings per share of 51 cents in Q2, falling short of the 57-cent Wall Street estimate
- Revenue declined 4.5% from the prior year to $2.56 billion, missing the $2.61 billion consensus forecast
- The snacks division posted a 6.2% decline to $914 million — marking the first sub-$1 billion quarter in four years
- Management slashed full-year adjusted EPS projections to $2.15–$2.25 from the previous $2.40–$2.55 range
- Shares have plunged more than 40% over the trailing year and face potential S&P 500 removal
Campbell’s delivered disappointing fiscal second-quarter results that sent the stock spiraling downward. Shares tumbled 5.4% during premarket hours Wednesday, positioning the iconic food company for its weakest trading level since August 2003.
The Camden, New Jersey-based company posted adjusted earnings of 51 cents per share for the quarter, undershooting analyst expectations by 6 cents. Revenue totaled $2.56 billion, representing a 4.5% year-over-year contraction and missing Wall Street’s $2.61 billion projection.
This marked the company’s second consecutive quarter of declining sales and its first earnings shortfall since the fourth quarter of fiscal 2023.
Performance weakened across Campbell’s two primary operating divisions. The snacks segment — featuring 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 time falling beneath the $1 billion threshold in four years.
Meanwhile, the meals and beverages unit, encompassing Campbell’s signature soup products, Prego pasta sauces, and V8 beverages, declined 3.7% to $1.65 billion. While Rao’s premium sauces demonstrated solid growth, the gains proved insufficient to counterbalance weakness in other product lines.
Net income decreased 16.2% to $145 million during the quarter.
Chief Executive Officer 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
Management revised its full-year organic net sales forecast to a decline of 1%–2%, retreating from its previous projection of a 1% decline to a 1% increase. The company also reduced its adjusted earnings per share guidance to $2.15–$2.25, representing a significant pullback from the earlier $2.40–$2.55 range.
Executives anticipate adjusted earnings will contract 12%–18% in fiscal 2026 versus the prior year, primarily due to tariff-driven headwinds affecting steel and aluminum costs for canned products. Beekhuizen indicated the company would fast-track cost-reduction initiatives to “stabilize” its struggling snacks business.
Campbell’s has established a goal of achieving $375 million in cost reductions by fiscal 2028.
S&P 500 Membership at Risk
Campbell’s holds the distinction of being an S&P 500 constituent since the index’s 1957 inception — ranking among approximately 50 original members still included. However, that long-standing membership now appears vulnerable.
The stock has declined more than 40% during the past twelve months, sharply contrasting with the S&P 500’s 21.7% gain over the identical timeframe. The company’s market capitalization stood near $7.5 billion before the earnings release. Following the premarket selloff, that valuation was projected to drop to approximately $6.96 billion — positioning it as the second-smallest component in the index.
The previous Friday saw four companies, including Match Group and Molina Healthcare, exit the S&P 500 following their classification among the index’s smallest members.
Analysts maintain an average 12-month price target of $28 on CPB shares, representing roughly 12% upside from the current trading level around $25.
