Campbell’s snack segment declines by 8% due to increased at-home cooking
The company highlighted that cracker sales were particularly affected by diminished consumer interest, and it plans to reinvigorate its Goldfish brand through increased marketing efforts and promotional activities ahead of the back-to-school season.
USA – Campbell’s, one of the largest processed food companies in the United States, has highlighted that consumers are becoming increasingly discerning, opting to cut back on discretionary snack purchases and cook more meals at home.
These trends are negatively impacting the company’s snacking division, which is recovering more slowly than expected and facing heightened competition.
Consumers are cooking at home at the highest rates seen since early 2020, which Mick Beekhuizen, the company’s Chief Executive, indicated has led to improved consumption across Campbell’s meals and beverage segment.
This segment experienced a 15% growth in sales, reaching US$1.46 billion in the latest quarter, aided by the company’s acquisition of Sovos Brands, the owner of Rao’s pasta sauce.
However, this gain was offset by an 8% decline in snack sales, which dropped to US$1.01 billion.
Total sales for the three months ending April 27 rose 4.5% to US$2.48 billion, exceeding analysts’ expectations of US$2.43 billion according to FactSet.
Campbell’s reported a profit of US$66 million, or 22 cents per share, down from US$133 million, or 45 cents per share, a year earlier. Adjusted earnings per share came in at 73 cents, surpassing Wall Street’s forecast of 65 cents.
The company reaffirmed its full-year outlook, projecting a sales increase of 6% to 8% this year and organic sales that may remain flat or decline by 2%.
Adjusted earnings per share are expected to be at the low end of the projected range of US$2.95 to US$3.05.
This outlook excludes tariffs, as the trade environment remains uncertain. If current tariffs remain in place, Campbell’s anticipates an additional negative impact on adjusted earnings of up to 5 cents per share.
“While we are not satisfied with the results of our snacks division, we remain confident in the strength of our snacks portfolio and continue to take steps to regain our momentum,” said Chief Financial Officer Carrie Anderson.
Overall, the soup maker reported higher sales in its fiscal third quarter and supported its full-year outlook, though it warned that it is likely to hit the low end of guidance due to tariffs.
Anderson mentioned that Campbell’s is taking proactive measures to limit the impact of these tariffs, including managing product costs and inventory levels, pursuing alternative sourcing strategies, and considering price adjustments as needed.
She noted that the direct impact of tariffs was not material to Campbell’s earnings in the most recent quarter.
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