We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Campbell's Struggles to Regain Momentum With Weaker Snack Sales
Read MoreHide Full Article
The Campbell's Company (CPB - Free Report) has faced considerable challenges, with its shares dropping 7.1%, underperforming the industry’s decline of 1.9% over the past three months. The company has been grappling with inflationary pressures on input costs and a highly competitive snack market. Despite proactive efforts, it is seeing weaker-than-expected growth, especially in its Snacks division, where sales have been sluggish. As the broader consumer environment remains volatile, CPB is struggling to regain its growth momentum.
Weakness in Snacks Division Weighs on CPB
Campbell’s has been experiencing weaker-than-expected performance in the Snacks business amid shifting consumer trends and competitive dynamics within the market. The trend continued in second-quarter fiscal 2025, wherein net sales in the division totaled $1,006 million, down 6% year over year. Organic sales in the segment declined 3%, caused by lower sales in third-party partner and contract brands, Goldfish crackers and Snyder’s of Hanover pretzels. The decline was attributed to a 2% drop in volume/mix and a 1% decrease in net price realization.
Total Snacks consumption for the company’s leadership brands declined by almost 1% in the fiscal second quarter. Operating earnings for the Snacks division fell 29%. In its last earnings call, management emphasized that while the company expects to make continued sequential progress on Snacks margins, it does not anticipate reaching the previously expected margin levels.
Image Source: Zacks Investment Research
Campbell’s Cost Woes Persist
Campbell's has been facing ongoing cost inflation, which impacted its fiscal second-quarter performance. The company’s adjusted gross profit margin contracted 100 basis points (bps) to 30.4%, impacted by cost inflation, supply-chain costs, unfavorable net price realization and the acquisition. Looking ahead, management expects inflation to remain in the low-single-digit range for fiscal 2025. To mitigate these challenges, Campbell's has implemented proactive cost-saving measures. However, its ability to effectively manage inflation while aligning with its strategic goals will be crucial for its growth.
Road Ahead Looks Challenging for CPB
Given the underperformance so far in fiscal 2025 and the slower-than-anticipated recovery in some snacking categories, management recently pointed at a muted second-half expectation and an update to full-year guidance. The company now forecasts fiscal 2025 net sales growth of 6-8%, down from its previous 9-11% estimation. Organic net sales are expected to range from a 2% decline to flat compared with the prior outlook of flat to 2% growth. The revised organic net sales outlook reflects a more subdued volume/mix contribution in the second half, following a weaker-than-expected recovery in snacking categories during the fiscal second quarter. Adjusted earnings per share (EPS) is now expected to decline 4% to 1%, ranging from $2.95 to $3.05, compared with the previous forecast of $3.12-$3.22 and the $3.08 reported in fiscal 2024.
Final Words on CPB Stock
Campbell's continues to face significant challenges, particularly in its Snacks division and due to ongoing cost inflation. While the company is taking proactive measures to manage these pressures, the revised outlook for fiscal 2025 indicates a more cautious path forward. As consumer trends shift and competition intensifies, Campbell's has a difficult task ahead if it is to achieve growth in the coming quarters. At present, CPB carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 0.3% and 2.2%, respectively, from the prior-year reported levels. POST delivered a trailing four-quarter earnings surprise of 22.3%, on average.
BRF S.A. (BRFS - Free Report) raises, produces and slaughters poultry and pork for the processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It presently has a Zacks Rank #2. BRFS delivered a trailing four-quarter average earnings surprise of 9.6%.
The Zacks Consensus Estimate for BRFS’ current financial-year sales and earnings indicates growth of 0.3% and 19.4%, respectively, from the year-ago reported figures.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company worldwide. It currently has a Zacks Rank #2. TSN delivered a trailing four-quarter earnings surprise of 52%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current financial-year sales and earnings indicates growth of 0.9% and 23.6%, respectively, from the prior-year reported levels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Campbell's Struggles to Regain Momentum With Weaker Snack Sales
The Campbell's Company (CPB - Free Report) has faced considerable challenges, with its shares dropping 7.1%, underperforming the industry’s decline of 1.9% over the past three months. The company has been grappling with inflationary pressures on input costs and a highly competitive snack market. Despite proactive efforts, it is seeing weaker-than-expected growth, especially in its Snacks division, where sales have been sluggish. As the broader consumer environment remains volatile, CPB is struggling to regain its growth momentum.
Weakness in Snacks Division Weighs on CPB
Campbell’s has been experiencing weaker-than-expected performance in the Snacks business amid shifting consumer trends and competitive dynamics within the market. The trend continued in second-quarter fiscal 2025, wherein net sales in the division totaled $1,006 million, down 6% year over year. Organic sales in the segment declined 3%, caused by lower sales in third-party partner and contract brands, Goldfish crackers and Snyder’s of Hanover pretzels. The decline was attributed to a 2% drop in volume/mix and a 1% decrease in net price realization.
Total Snacks consumption for the company’s leadership brands declined by almost 1% in the fiscal second quarter. Operating earnings for the Snacks division fell 29%. In its last earnings call, management emphasized that while the company expects to make continued sequential progress on Snacks margins, it does not anticipate reaching the previously expected margin levels.
Image Source: Zacks Investment Research
Campbell’s Cost Woes Persist
Campbell's has been facing ongoing cost inflation, which impacted its fiscal second-quarter performance. The company’s adjusted gross profit margin contracted 100 basis points (bps) to 30.4%, impacted by cost inflation, supply-chain costs, unfavorable net price realization and the acquisition. Looking ahead, management expects inflation to remain in the low-single-digit range for fiscal 2025. To mitigate these challenges, Campbell's has implemented proactive cost-saving measures. However, its ability to effectively manage inflation while aligning with its strategic goals will be crucial for its growth.
Road Ahead Looks Challenging for CPB
Given the underperformance so far in fiscal 2025 and the slower-than-anticipated recovery in some snacking categories, management recently pointed at a muted second-half expectation and an update to full-year guidance. The company now forecasts fiscal 2025 net sales growth of 6-8%, down from its previous 9-11% estimation. Organic net sales are expected to range from a 2% decline to flat compared with the prior outlook of flat to 2% growth. The revised organic net sales outlook reflects a more subdued volume/mix contribution in the second half, following a weaker-than-expected recovery in snacking categories during the fiscal second quarter. Adjusted earnings per share (EPS) is now expected to decline 4% to 1%, ranging from $2.95 to $3.05, compared with the previous forecast of $3.12-$3.22 and the $3.08 reported in fiscal 2024.
Final Words on CPB Stock
Campbell's continues to face significant challenges, particularly in its Snacks division and due to ongoing cost inflation. While the company is taking proactive measures to manage these pressures, the revised outlook for fiscal 2025 indicates a more cautious path forward. As consumer trends shift and competition intensifies, Campbell's has a difficult task ahead if it is to achieve growth in the coming quarters. At present, CPB carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Post Holdings, Inc. (POST - Free Report) operates as a consumer-packaged goods holding company in the United States and internationally. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 0.3% and 2.2%, respectively, from the prior-year reported levels. POST delivered a trailing four-quarter earnings surprise of 22.3%, on average.
BRF S.A. (BRFS - Free Report) raises, produces and slaughters poultry and pork for the processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It presently has a Zacks Rank #2. BRFS delivered a trailing four-quarter average earnings surprise of 9.6%.
The Zacks Consensus Estimate for BRFS’ current financial-year sales and earnings indicates growth of 0.3% and 19.4%, respectively, from the year-ago reported figures.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company worldwide. It currently has a Zacks Rank #2. TSN delivered a trailing four-quarter earnings surprise of 52%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current financial-year sales and earnings indicates growth of 0.9% and 23.6%, respectively, from the prior-year reported levels.