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Campbell's Q4 Earnings Beat Estimates, Organic Sales Drop 3% Y/Y
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Key Takeaways
CPB Q4 adjusted EPS was $0.62, beating estimates but down 2% year over year.
Net sales rose 1% to $2.32B, aided by Sovos Brands, while organic sales slipped 3%.
Gross margin fell 90 bps to 30.5% on cost inflation and supply-chain expenses.
The Campbell's Company (CPB - Free Report) reported mixed fourth-quarter fiscal 2025 results, with the bottom line surpassing the Zacks Consensus Estimate and the top line missing the same. Quarterly earnings declined year over year while net sales increased.
CPB’s Quarterly Performance: Key Metrics and Insights
Adjusted earnings per share (EPS) were 62 cents, down 2% year over year, due to lower adjusted earnings before interest and taxes (EBIT). However, the bottom line beat the Zacks Consensus Estimate of 57 cents.
Net sales of $2,321 million grew 1% year over year, but came below the Zacks Consensus Estimate of $2,334 million. The year-over-year increase in the top line stemmed from the benefit of the Sovos Brands acquisition. Organic net sales dipped 3% to $2.2 billion, mainly due to lower volume/mix, partly related to the anticipated reversal of the favorable timing of shipments in the third quarter with respect to the implementation of its existing enterprise-resource planning system for Sovos Brands. The additional week is likely to have contributed 7% to net sales, 9% to adjusted EBIT and 10% to adjusted EPS, or six cents a share, to fourth-quarter fiscal 2025 results.
The Campbell's Company Price, Consensus and EPS Surprise
The company’s adjusted gross profit fell to $709 million from $719 million, while the adjusted gross profit margin declined 90 basis points (bps) to 30.5%. The margin decrease was primarily due to cost inflation and supply-chain expenses with moderate tariff impacts, partly offset by supply-chain productivity benefits, favorable net price realization and cost savings.
Adjusted marketing and selling expenses rose 5% to $197 million, primarily due to the impact of the increased advertising and consumer promotion expenses. In contrast, adjusted administrative expenses dipped 4% to $158 million, mainly reflecting benefits from cost savings and lower incentive compensation, partly offset by increased general administrative costs and inflation. The adjusted EBIT dropped 2% to $321 million, mainly owing to reduced adjusted gross profit and elevated adjusted marketing and selling expenses, somewhat offset by lower adjusted administrative expenses and adjusted other expenses.
Decoding CPB’s Segmental Performance
Meals & Beverages: Net sales reached $1,202 million and were comparable to the year-ago period, driven by the acquisition. Excluding the additional week in the quarter and the noosa divestiture, organic net sales dipped 3%, DUE TO declines in Rao's pasta sauces and U.S. soup. A 4% fall in volume/mix was partly offset by a favorable net price realization of 1%. Sales of Rao's pasta sauces fell owing to the planned reversal of the favorable third-quarter timing of shipments with respect to the implementation of its existing enterprise-resource planning system for Sovos Brands.
Snacks: Net sales totaled $1,012 million, up 2% year over year. Excluding the impact of the Pop Secret divestiture and an extra week in the quarter, organic net sales were down 2%, primarily due to decreases in third-party partner and contract brands and Snyder's of Hanover pretzels. The decline was caused by a 5% drop in volume/mix, with net price realization of 2%.
CPB’s Other Financial Metrics
As of the end of the reported quarter, Campbell's had cash and cash equivalents of $132 million and a total debt of $6,857 million. The company used $187 million in net cash from operating activities for fiscal 2025. Capital expenditures were $426 million in the said period.
CPB paid $459 million in cash dividends and repurchased nearly $62 million in shares during the period. As of Aug. 3, 2025, the company had approximately $198 million available under its anti-dilutive share repurchase program and $301 million under the September 2021 strategic share repurchase program.
As of the end of the fiscal fourth quarter, Campbell's generated almost $145 million in savings under its cost savings program of $250 million announced in September 2024.
CPB’s Fiscal 2026 Guidance
Consumers have been highly deliberate in their food choices, with a commitment to premiumization, flavor exploration, health and wellness, and cooking at home. CPB’s brand portfolio is poised well to leverage such trends with brand support and innovation. Simultaneously, CPB battles a dynamic operating and regulatory landscape resulting in substantial input cost woes, thanks to tariffs, which, despite major mitigation efforts, lower its earnings view for the fiscal year.
However, the company anticipates making progress toward sustainable growth in fiscal 2026 while mitigating some of the short-term cost headwinds. Fiscal 2026 guidance is based on the exclusion of the additional week in fiscal 2025.
The company forecasts fiscal 2026 net sales to be flat to down 2%. Organic net sales are expected to range from a 1% decline to 1% rise year over year. Adjusted EBIT is estimated to decrease 9-13%. Adjusted EPS is expected to decline 12-18%, in the range of $2.40-$2.55, compared with $2.97 reported in fiscal 2025.
Other assumptions include low-single digit core inflation excluding the tariff impacts, productivity gains comprising tariff mitigation of nearly 5% of COPS, enterprise cost savings of about $70 million, adjusted effective tax rate of almost 24%, adjusted interest expense of $320-$325 million, share count of about 300 million and capital expenditures of roughly 4% of net sales.
Shares of this Zacks Rank #5 (Strong Sell) company have lost 19.3% in the past six months compared with the industry's decline of 6.5%.
POST delivered a trailing four-quarter earnings surprise of 21.4%, on average. The Zacks Consensus Estimate for Post Holdings’ current financial-year earnings indicates growth of 10.9% from the year-ago number.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently sports a Zacks Rank of 1.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current financial-year sales and earnings indicates growth of 6.6% and 19.1%, respectively, from the prior-year levels. CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.
Ingredion Incorporated (INGR - Free Report) , which is a provider of ingredient solutions specialized in nature-based sweeteners, starches and nutrition ingredients, currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for INGR’s current financial-year earnings is expected to rise 6.7% from the corresponding year-ago reported figure. INGR delivered a trailing four-quarter earnings surprise of 11.1%, on average.
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Campbell's Q4 Earnings Beat Estimates, Organic Sales Drop 3% Y/Y
Key Takeaways
The Campbell's Company (CPB - Free Report) reported mixed fourth-quarter fiscal 2025 results, with the bottom line surpassing the Zacks Consensus Estimate and the top line missing the same. Quarterly earnings declined year over year while net sales increased.
CPB’s Quarterly Performance: Key Metrics and Insights
Adjusted earnings per share (EPS) were 62 cents, down 2% year over year, due to lower adjusted earnings before interest and taxes (EBIT). However, the bottom line beat the Zacks Consensus Estimate of 57 cents.
Net sales of $2,321 million grew 1% year over year, but came below the Zacks Consensus Estimate of $2,334 million. The year-over-year increase in the top line stemmed from the benefit of the Sovos Brands acquisition. Organic net sales dipped 3% to $2.2 billion, mainly due to lower volume/mix, partly related to the anticipated reversal of the favorable timing of shipments in the third quarter with respect to the implementation of its existing enterprise-resource planning system for Sovos Brands. The additional week is likely to have contributed 7% to net sales, 9% to adjusted EBIT and 10% to adjusted EPS, or six cents a share, to fourth-quarter fiscal 2025 results.
The Campbell's Company Price, Consensus and EPS Surprise
The Campbell's Company price-consensus-eps-surprise-chart | The Campbell's Company Quote
The company’s adjusted gross profit fell to $709 million from $719 million, while the adjusted gross profit margin declined 90 basis points (bps) to 30.5%. The margin decrease was primarily due to cost inflation and supply-chain expenses with moderate tariff impacts, partly offset by supply-chain productivity benefits, favorable net price realization and cost savings.
Adjusted marketing and selling expenses rose 5% to $197 million, primarily due to the impact of the increased advertising and consumer promotion expenses. In contrast, adjusted administrative expenses dipped 4% to $158 million, mainly reflecting benefits from cost savings and lower incentive compensation, partly offset by increased general administrative costs and inflation. The adjusted EBIT dropped 2% to $321 million, mainly owing to reduced adjusted gross profit and elevated adjusted marketing and selling expenses, somewhat offset by lower adjusted administrative expenses and adjusted other expenses.
Decoding CPB’s Segmental Performance
Meals & Beverages: Net sales reached $1,202 million and were comparable to the year-ago period, driven by the acquisition. Excluding the additional week in the quarter and the noosa divestiture, organic net sales dipped 3%, DUE TO declines in Rao's pasta sauces and U.S. soup. A 4% fall in volume/mix was partly offset by a favorable net price realization of 1%. Sales of Rao's pasta sauces fell owing to the planned reversal of the favorable third-quarter timing of shipments with respect to the implementation of its existing enterprise-resource planning system for Sovos Brands.
Snacks: Net sales totaled $1,012 million, up 2% year over year. Excluding the impact of the Pop Secret divestiture and an extra week in the quarter, organic net sales were down 2%, primarily due to decreases in third-party partner and contract brands and Snyder's of Hanover pretzels. The decline was caused by a 5% drop in volume/mix, with net price realization of 2%.
CPB’s Other Financial Metrics
As of the end of the reported quarter, Campbell's had cash and cash equivalents of $132 million and a total debt of $6,857 million. The company used $187 million in net cash from operating activities for fiscal 2025. Capital expenditures were $426 million in the said period.
CPB paid $459 million in cash dividends and repurchased nearly $62 million in shares during the period.
As of Aug. 3, 2025, the company had approximately $198 million available under its anti-dilutive share repurchase program and $301 million under the September 2021 strategic share repurchase program.
As of the end of the fiscal fourth quarter, Campbell's generated almost $145 million in savings under its cost savings program of $250 million announced in September 2024.
CPB’s Fiscal 2026 Guidance
Consumers have been highly deliberate in their food choices, with a commitment to premiumization, flavor exploration, health and wellness, and cooking at home. CPB’s brand portfolio is poised well to leverage such trends with brand support and innovation. Simultaneously, CPB battles a dynamic operating and regulatory landscape resulting in substantial input cost woes, thanks to tariffs, which, despite major mitigation efforts, lower its earnings view for the fiscal year.
However, the company anticipates making progress toward sustainable growth in fiscal 2026 while mitigating some of the short-term cost headwinds. Fiscal 2026 guidance is based on the exclusion of the additional week in fiscal 2025.
The company forecasts fiscal 2026 net sales to be flat to down 2%. Organic net sales are expected to range from a 1% decline to 1% rise year over year. Adjusted EBIT is estimated to decrease 9-13%. Adjusted EPS is expected to decline 12-18%, in the range of $2.40-$2.55, compared with $2.97 reported in fiscal 2025.
Other assumptions include low-single digit core inflation excluding the tariff impacts, productivity gains comprising tariff mitigation of nearly 5% of COPS, enterprise cost savings of about $70 million, adjusted effective tax rate of almost 24%, adjusted interest expense of $320-$325 million, share count of about 300 million and capital expenditures of roughly 4% of net sales.
Shares of this Zacks Rank #5 (Strong Sell) company have lost 19.3% in the past six months compared with the industry's decline of 6.5%.
Stocks to Consider in the Consumer Staples Space
Post Holdings (POST - Free Report) , which is a consumer-packaged goods holding company, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
POST delivered a trailing four-quarter earnings surprise of 21.4%, on average. The Zacks Consensus Estimate for Post Holdings’ current financial-year earnings indicates growth of 10.9% from the year-ago number.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently sports a Zacks Rank of 1.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current financial-year sales and earnings indicates growth of 6.6% and 19.1%, respectively, from the prior-year levels. CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.
Ingredion Incorporated (INGR - Free Report) , which is a provider of ingredient solutions specialized in nature-based sweeteners, starches and nutrition ingredients, currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for INGR’s current financial-year earnings is expected to rise 6.7% from the corresponding year-ago reported figure. INGR delivered a trailing four-quarter earnings surprise of 11.1%, on average.