Campbell’s reports first-quarter fiscal 2026 results amid cost pressures
During the quarter, Campbell entered into definitive agreements to acquire a 49 percent interest in La Regina, the producer of Rao’s tomato-based pasta sauces.
USA – The Campbell’s Company released its first quarter fiscal 2026 earnings, showing revenue and EPS beating analyst expectations despite year-over-year declines driven by tariffs, inflation, and softer snack demand.
Net sales fell 3% to US$2.7 billion, with organic sales down 1%, while adjusted EPS dropped 13% to US$0.77, surpassing forecasts of US$0.73.
The company reaffirmed its full-year guidance, anticipating adjusted EPS of US$2.40 – US$2.55.
Meals & Beverages net sales decreased 4% to US$1.665 billion, or 2% organically excluding the noosa divestiture, due to declines in U.S. soup, Canada, SpaghettiOs, Pace sauces, and V8, offset by Rao’s growth.
Condensed cooking soups and broths like Swanson and Pacific posted gains, adding over 2 million new buyers, especially millennials, for eight straight quarters of share growth. Ready-to-serve soups lagged category trends.
The snacks division saw a 2% net sales drop, or 1% organically post-Pop Secret divestiture, hit by lower volumes in partner brands, Snyder’s pretzels, Goldfish, Cape Cod chips, and Fresh Bakery, partially balanced by Pepperidge Farm cookies.
An unfavorable volume/mix of 3% outweighed 2% net price gains, resulting in operating earnings down 10%.
Adjusted gross profit margin contracted 150 basis points to 29.9%, pressured by 520 basis points in cost inflation (cocoa, eggs), supply chain issues, and 200 basis points from gross tariffs, net US$0.04 EPS impact.
Cost savings, productivity, and pricing mitigated some headwinds, yielding US$224 million operating cash flow. Adjusted EBIT fell 11% to US$383 million.
These pressures reflect ongoing consumer caution in snacks, favoring premium at-home cooking amid economic headwinds.
Campbell’s leadership brands held flat consumption, underscoring resilience in core soups.
Campbell’s maintains FY26 guidance despite macro challenges, focusing on cost initiatives, productivity, and premium segments like Rao’s for elevated meal occasions.
The company eyes a 49% stake in Italy’s La Regina, signaling international expansion in sauces.
While the first quarter results highlight ongoing pressures in the packaged food industry, Campbell’s reaffirmation of its full-year outlook suggests resilience and a commitment to long-term growth.
Analysts note that the company’s focus on Rao’s and snacks innovation could prove pivotal in sustaining momentum and enhancing shareholder value in fiscal 2026.
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