Campbell's Q2 2026 Prepared remarks Earnings Report

Campbell's EPS Results

• Actual EPS: $0.51
• Consensus EPS: $0.57
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: $0.74

Campbell's Revenue Results

• Actual Revenue: $2.56 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: -4.50%

Campbell's Announcement Details

• Quarter: Q2 2026 Prepared remarks
• Date: 3/11/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, March 11, 2026
• Conference Call Time: 8:00AM ET

Campbell's (NASDAQ:CPB) (NASDAQ: CPB) is a branded food company that develops, produces and markets packaged meals, beverages and snacks. Its portfolio includes soups, sauces, pasta products, frozen meals, dips, crackers, cookies and yogurt.

The company's brands include Campbell's, Goldfish, Pepperidge Farm, V8, Prego, Pace, Swanson, Rao's, Michael Angelo's and noosa. Products are sold primarily through grocery stores, mass merchants, club stores, convenience stores, food-service distributors and e-commerce channels.

Founded in 1869 by Joseph A. Campbell, the company became widely known for its condensed soups and has expanded over time through product development and acquisitions. Campbell's serves consumers mainly in the United States and Canada, with selected products available in international markets.

Campbell's Q2 2026 Prepared remarks Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Q2 results missed expectations, with organic net sales down 3%, adjusted EBIT down 24%, and adjusted EPS down to $0.51 as weaker snacks performance and storm-related shipment delays pressured the quarter.
• Positive Sentiment: Meals & Beverages held up better, as in-market consumption rose 2% and share was flat overall, supported by leadership brands including Rao's, Campbell's, and Pacific.
• Negative Sentiment: Snacks remained the main weak spot, with consumption down 3% and share down 0.3 points, driven by fresh bakery execution issues and stronger competition in salty snacks.
• Positive Sentiment: Rao's continues to be a standout growth engine, surpassing $1 billion in trailing 12-month net sales and posting 14.5% consumption growth in the quarter, making it Campbell's fourth billion-dollar brand.
• Neutral Sentiment: Full-year guidance was cut to reflect slower snacks recovery, incremental trade spending, and a modestly higher tariff headwind, with organic net sales now expected to fall 2% to 1% and adjusted EPS seen at $2.15 to $2.25.

Presentation

[Rebecca Gardy, Chief Investor Relations Officer at The Campbell's Company]

Good morning, welcome to The Campbell's Company second quarter fiscal 2026 earnings conference call. I’m Rebecca Gardy, Campbell's Chief Investor Relations Officer. Joining me today are Mick Beekhuizen, Chief Executive Officer, and our Chief Financial Officer, Todd Cunfer. In addition to today’s prerecorded remarks, we will host an analyst question and answer session via webcast at 9:00 A.M. Eastern time today, March 11, 2026. The presentation, a transcript, an audio recording of management’s prepared remarks, and today’s earnings press release are available on our website in the Investors section. A replay of the webcast will be posted there following the Q&A with a full transcript available within 24 hours. You will find today’s agenda on Slide 2. Mick will provide insights into our second quarter performance as well as our in-market performance by division.

[Rebecca Gardy, Chief Investor Relations Officer at The Campbell's Company]

Todd will discuss the financial results of the quarter in more detail and review our updated guidance for fiscal year 2026. During today’s discussion, management may make forward-looking statements which reflect our current expectations about future plans and performance. These statements rely on assumptions and estimates and are subject to risks and uncertainties. Please refer to Slide 3 of our presentation or our SEC filings for a discussion of factors that could cause actual results to differ materially. We also reference non-GAAP measures that we believe provide useful information for investors. Reconciliations to the most directly comparable GAAP measures are included in the appendix of our earnings presentation. Non-GAAP measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Now it is my pleasure to introduce our Chief Executive Officer, Mick Beekhuizen. Mick?

[Mick Beekhuizen, CEO at The Campbell's Company]

Thanks, Rebecca. Good morning, everyone, thank you for joining us. Let me start with a clear and candid update on Q2 as the performance was below our expectations. Underlying consumer demand remains relatively steady, but our reported results were pressured by two key factors: weaker than expected performance in snacks and storm-related shipment delays in Meals & Beverages that shifted some volume from Q2 into Q3. In Meals & Beverages, in-market demand grew, driven by our leadership brands, including Rao's, and that strength continues to anchor our portfolio. In snacks, the recovery is taking longer than anticipated. We made sequential progress on Goldfish, but fresh bakery execution disruptions and elevated competitive intensity in salty weighed on volume and margins. We are taking focused actions to restore fresh bakery service to sharpen our value, launch incremental innovation, and improve in-market execution in salty while continuing to build on Goldfish momentum.

[Mick Beekhuizen, CEO at The Campbell's Company]

At the same time, we’re accelerating enterprise cost savings to support margins and reinvestment, including $100 million of additional near-term overhead reduction initiatives that will increase efficiency and effectiveness across the organization. Todd will provide more details in a few moments. Largely driven by the near-term outlook for our snacks business and select incremental trade investments, we’ve updated our fiscal 2026 guidance. We remain focused on executing our strategy and are increasing our intensity, especially on snacks execution and cost savings. Turning to key drivers of our Q2 results, in-market consumption improved sequentially from down 1% in Q1 to flat in Q2, driven by Meals & Beverages. Organic net sales declined 3% in Q2, reflecting lower than anticipated in-market consumption within snacks in combination with shipment delays late in the quarter, which largely impacted Meals & Beverages.

[Mick Beekhuizen, CEO at The Campbell's Company]

Adjusted EBIT declined 24% in Q2, driven by lower sales, operational disruptions, especially in fresh bakery, and tariff-related cost pressure. Cost savings and productivity actions helped to partially offset these headwinds. Adjusted EPS was $0.51 for the quarter, consistent with the pressure on Adjusted EBIT. Taken together, these results underscore the ongoing pressures we are navigating while reinforcing our focus on execution and disciplined actions to stabilize snacks performance, maintaining momentum in Meals & Beverages, and position the overall business for sustainable growth. Even in a challenging environment, we continue to see meaningful share resilience in Meals & Beverages across our portfolio. This was especially evident during the holiday period and in categories benefiting from at-home cooking trends. Across our leadership brands, Q2 dollar consumption was relatively flat, and dollar share declined 0.2 points. In Meals & Beverages, consumption increased 2%, and overall share was flat year-over-year.

[Mick Beekhuizen, CEO at The Campbell's Company]

In this environment, holding or growing share is meaningful, and it underscores the strength of our brands and our relevance with consumers. Campbell's, Rao's, and Pacific all either grew or held share versus last year. These brands benefit from sustained at-home cooking behavior, high consumer trust, and compelling value propositions that resonate given increased pressure on consumers’ wallets. This performance reinforces the important role that Meals & Beverages continues to play in our portfolio. In snacks, consumption declined 3%, and overall share declined 0.3 points. That said, we are seeing important pockets of strength with Goldfish, Pepperidge Farm, and Snack Factory holding or growing share. These wins show that our snacks brands resonate with consumers and can still outperform even with a tough category backdrop.

[Mick Beekhuizen, CEO at The Campbell's Company]

Our brand portfolio is well positioned to deliver sustainable growth as our brands have a strong right to win across the four consumer need state pillars of cooking and comfort, premiumization, flavor exploration, and health and wellness. We will fully capitalize on this right to win by accelerating innovation, evolving our products to further strengthen the consumer value proposition, and increasing focus on executional excellence at retail, notably in omni-channel. Turning to Slide eight. Meals & Beverages consumption remained strong in Q2, with dollar consumption up 2% versus last year, partially driven by strong holiday demand. However, organic net sales declined 2%, reflecting storm-related shipping delays in January, which created roughly a one-point headwind to reported net sales. Let me spend a few moments on the Meals & Beverages portfolio, starting with soup.

[Mick Beekhuizen, CEO at The Campbell's Company]

Overall soup consumption was essentially flat in the quarter, but importantly, cooking occasions continued to provide a meaningful tailwind to in-market demand. Within a competitive category environment, we are competing effectively in at-home cooking occasions with strong brand positioning and disciplined price-value architecture. In broth, category consumption grew for the 10th consecutive quarter, driven by younger consumers. While competition has intensified due to private label supply recovery and increased promo spending by brand competitors, Pacific delivered strong double-digit dollar consumption and volume growth, and Swanson continued to grow dollar consumption. In condensed, we grew share for the ninth consecutive quarter, led by our cooking portfolio. During the key holiday period, Campbell's delivered its highest dollar sales in the past three years. While the ready-to-serve category remained slightly negative despite sequential improvement, we delivered share gains driven by Pacific and Rao's.

[Mick Beekhuizen, CEO at The Campbell's Company]

Pricing actions performed in line with expectations. We continue to actively monitor elasticities and competitive dynamics. We remain confident in our soup portfolio as we move through the balance of the year with advantage brands and clear line of sight to build on the share positions as conditions normalize. Building upon Campbell's strong momentum and right to win in the consumer need state pillar of cooking and comfort, we're excited about the launch of Campbell's condensed sauces. Consumers want to make great meals their families will love. After a busy day, they need solutions that are simple, reliable, and affordable. 90% of consumers recognize that Campbell's condensed soups are a convenient ingredient to enable semi-scratch home cooking. Building upon this existing consumer behavior, we're launching Campbell's condensed sauces.

[Mick Beekhuizen, CEO at The Campbell's Company]

These products will be merchandised in the soup aisle and will break through with sauce in big, bold font and on the front label. Campbell's condensed sauces will further build credentials for the soup aisle as a cooking solutions destination. The condensed sauces platform will ship this June with robust trade and consumer support beginning during back to school to build momentum ahead of peak holiday season. Turning to Slide 11. When we added the Rao's brand to the Campbell's portfolio, we were very clear about our conviction of its continued growth trajectory. Rao's has a clear right to win as consumers are increasingly seeking quality, authenticity, and an elevated restaurant quality experience at home. That conviction was validated. As of the second quarter, the total Rao's brand surpassed $1 billion in net sales on a trailing 12-month basis, growing 14.5% in consumption during the quarter.

[Mick Beekhuizen, CEO at The Campbell's Company]

This is a significant milestone that reflects the strength of the brand, its premium positioning, and the disciplined execution of our teams. Rao's is now our fourth billion-dollar brand, joining Campbell's, Goldfish, and Pepperidge Farm. Rao's continues to be one of the best growth stories in all of food. Although there is continued opportunity to expand the brand, sauce remains boss. Rao's Italian pasta sauce is the number one brand in absolute dollar growth, the number one in market share growth, and now holds the top share position across all eight U.S. Circana-defined regions. Additionally, Prego is maintaining its number two position in each of these regions. Rao's pasta sauce continues to gain share through strong household penetration growth, industry-leading shelf productivity, and innovation that is resonating with consumers and customers.

[Mick Beekhuizen, CEO at The Campbell's Company]

Creamy Marinara is a clear example of leading innovation in the category on both dollars and velocity, reinforcing Rao's ability to elevate the category while expanding usage occasions. In Q2, Rao's sauce delivered 11.5% consumption growth, outpacing the Italian sauce category and helping to drive solid dollar share growth. Rao's sauce growth is driven by fundamentals, expanding its household base, delivering strong velocities, and building scale with one of the most productive assortments on shelf. This is not a pricing or promotion story. It's a sauce brand that consumers are actively and repeatedly choosing. Surpassing $1 billion is not the destination. It's an important milestone in what we believe is a long-term growth story. With strong fundamentals, ongoing innovation, and disciplined investment support, the Rao's brand exemplifies our commitment to establishing sustainable growth within Meals & Beverages. Now let's turn to our snacks business on Slide 12.

[Mick Beekhuizen, CEO at The Campbell's Company]

As I've described, the category continues to reflect evolving consumer preferences. Consumers are still snacking, but how and why they snack is changing, with greater intentionality around purchases and increased focus on health and wellness, premium and flavor-forward experiences, and clear value. That said, Snacks performance in the quarter was weaker than we expected, driven by lower than anticipated in-market consumption, as sequential progress in Goldfish was offset by the execution challenges in fresh bakery and increased competitive intensity within our salty portfolio. Looking at the financial results, organic net sales declined by 6%, driven by volume declines, with net price realization neutral for the quarter. As expected, partner and contract brands were about a one-point headwind to net sales. As mentioned during the previous quarter, shipment timing between Q1 and Q2 negatively impacted net sales for the second quarter.

[Mick Beekhuizen, CEO at The Campbell's Company]

Importantly, while the quarter was pressured, we're making progress in key areas and remain confident in the strength of our Snacks brand portfolio and our right to win. We participate in categories where consumers continue to seek connection, comfort, and elevated experiences. Our focus now is on maintaining the momentum within Goldfish, improving our execution within fresh bakery, and increasing our competitive position within our salty portfolio. We are taking clear actions to address these issues and position Snacks for improved performance. On slide 13, I want to spend a moment on Goldfish, which is a core pillar in stabilizing our Snacks business. Goldfish is the number one brand in crackers with households with kids and has a broad appeal. Importantly, households with kids represent one of the most resilient snacking cohorts, and that's where Goldfish continues to have a clear right to win.

[Mick Beekhuizen, CEO at The Campbell's Company]

A fun snack without artificial colors, flavors, or preservatives, and baked with 100% real cheese. Given the importance of the brand to our overall Snacks business, we took a hard look at what was getting in the way of Goldfish performing consistently, and that led us to simplify, sharpen, and refocus how we manage the business. We sharpened the value architecture, anchored in larger sizes, including multipacks, reduced complexity versus prior years, and focused innovation on scalable platforms, including seasoned pretzels and targeted limited time offerings. As a result, we saw sequential improvement in consumption in Q2, with stronger performance where value architecture and retail execution are aligned. As we look ahead, we're staying tightly focused on Goldfish most valuable consumer, families with kids. This is where the brand's equity is strongest and where disciplined in-market execution and focused innovation can drive improved momentum over time.

[Mick Beekhuizen, CEO at The Campbell's Company]

Turning to Pepperidge Farm, cookies continued to do well during the quarter, driven by holiday performance and successful innovation across our two largest platforms, Milano and Chessmen, which attract consumers into premium worth it moments. Milano remained a key contributor to category growth, supported by white chocolate innovation and limited time offerings, while Chessmen returned to growth for the first time in four quarters. As a result, cookies delivered another quarter of share gains, reinforcing the durability of premium indulgences. However, our Pepperidge Farm fresh bakery business was negatively impacted by execution challenges. Throughout the quarter, execution deteriorated, driven by manufacturing and distribution disruptions, which were exacerbated by the January winter storm. We quickly deployed a cross-functional team fully focused on improving the execution, and we're already seeing measurable improvements.

[Mick Beekhuizen, CEO at The Campbell's Company]

As part of our efforts, we're investing to make sure that the improvements are sustainable as we turn the trajectory of the fresh bakery business. I expect us to continue to make progress throughout the third quarter and be fully recovered during our fiscal fourth quarter. The overall brand is in a good position, which is giving us confidence that as execution improves, Pepperidge Farm Bakery will return to sustainable growth. Turning to salty snacks, the sequential progress within pretzels was offset by competitive headwinds in chips. Specifically in pretzels, we saw sequential improvement during the quarter led by Snyder's of Hanover. Holiday specific limited time product offerings and improved execution drove momentum.

[Mick Beekhuizen, CEO at The Campbell's Company]

We're reinforcing that progress by reigniting the core, including a refreshed visual identity to strengthen shelf presence and shoppability, and bringing better for you innovations such as our Snyder's of Hanover Sticks platform, which offers a bundle of protein and fiber benefits. In chips, we're placing a greater focus on value to remain competitive, while continuing to invest behind platforms that resonate with today's consumers. Kettle Brand and Late July innovation, particularly avocado oil, is aligned with premium and better for you trends and is improving velocity in the category. Overall, our salty portfolio is well-positioned and will continue to evolve with consumer preferences, particularly within premium and better for you offerings. New product launches across our salty portfolio continue to be a key focus to evolve our brands. At the same time, to improve our competitive positioning, we need to sharpen our value and focus on in-market execution.

[Mick Beekhuizen, CEO at The Campbell's Company]

As I wrap up, it's evident the consumer remains highly intentional with a clear focus on cooking and comfort, premiumization, flavor exploration, and better for you. It's also evident that our brand portfolio is highly differentiated and well-positioned to meet these consumer need states. I'm pleased with the performance of the Meals & Beverages portfolio this quarter, with Rao's leading the way and demonstrating our ability to grow in market consumption. In snacks, progress has been slower than we anticipated, and while we are encouraged by the sequential improvement in Goldfish, maintaining momentum into the second half of the fiscal year is critical. We're actively addressing execution challenges within bakery, strengthening competitive positioning within salty, and delivering additional cost reductions across the company to support margins and continued brand investment.

[Mick Beekhuizen, CEO at The Campbell's Company]

We're making progress while navigating a dynamic operating environment, but we have more work to do and are taking decisive action to return to sustainable, profitable growth. With that, let me turn it over to Todd.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

Thank you, Mick, and good morning, everyone. I will walk through our Q2 fiscal 2026 results and full year outlook. As you will see, our results reflect a challenging operating environment, including competitive intensity, inflation, and tariff impacts. We continue to take disciplined actions to manage costs, invest in our brands, and position the business for improved performance. Starting with the headline results, Q2 came in below our expectations, reflecting continued top and bottom line pressure in a dynamic operating environment. Net sales declined year-over-year, Adjusted EBIT declined significantly, and Adjusted EPS reflected lower operating performance. Turning to slide 19, the organic net sales decline of 3% reflects volume and mix as the primary headwinds, indicating a more value conscious consumer and elevated competitive intensity. Net price realization was roughly neutral. Divestitures, including Noosa, reduced reported net sales by approximately a point as expected.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

In Meals and Beverages, underlying U.S. retail consumption grew, driven by broth and Rao's. However, reported net sales tracked behind consumption, driven primarily by a point from the January storm impact on customer shipments, as well as headwinds across food service, Canada, and Latin America. In snacks, organic net sales declined more materially, driven by unfavorable volume and mix across leadership brands. The shift in volume between Q1 and Q2 and continued pressure in contract and partner channels. Net pricing was modestly favorable but insufficient to offset volume pressure. On slide 20, second quarter Adjusted gross profit margin decreased 270 basis points to 27.7%. Inflation and other supply chain costs were the primary drivers, including approximately 230 basis points of gross tariff impact.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

These pressures were partially mitigated by cost savings and supply chain productivity improvements and favorable net price realization, which together offset a meaningful portion of the inflationary headwinds. Net price realization was slightly favorable, though less so than in the prior quarter, due to additional promotional activity, particularly in our M&B business. In the second quarter, Campbell's made progress towards its fiscal 2028 cost savings target of $375 million by delivering approximately $20 million in new savings, bringing total cost savings achieved to $180 million. The company continues to expect these cost savings to be one of several levers to help offset tariff headwinds. We will be aggressive on cost savings initiatives and have identified additional near-term cost savings, including $100 million of overhead reductions over the next couple of years, two-thirds of which are outside our current peak enterprise cost savings program.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

Turning to slide 21, Adjusted marketing and selling expenses stayed flat at 10% as a percentage of net sales, reflecting the importance of continued investment behind our brands amid a softer top line. Administrative expenses also remained flat as a percentage of sales, demonstrating ongoing discipline in overhead cost management. As shown on slide 22, second quarter Adjusted EBIT decreased 24%, primarily driven by the lower Adjusted gross profit I just discussed, including a $14 million impact of customer shipment delays related to the January storm. Marketing and selling investments, along with other operating items, were largely neutral on a margin basis. Overall, Adjusted EBIT margin declined from 13.9% to 11%. On slide 23, Adjusted EPS declined to $0.51, down 31% versus prior-year. The decrease was almost entirely attributable to lower Adjusted EBIT, including an approximate $0.04 from the January storm-related impacts.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

Interest expense, taxes, and share count were essentially neutral in the quarter. Turning to segment performance on slide 24, Meals & Beverages results were impacted, as I mentioned, by an estimated $20 million due to customer shipment delays caused by January's winter storm, as well as competitive pressures and tariff impacts. Organic net sales decreased modestly with volume and mix pressure partially offset by pricing. Operating margin declined to 15.3%, reflecting the same inflationary and volume-related challenges we discussed earlier. Organically, sales were down 2%, driven by volume and mix declines of 2%, partially offset by favorable net price realization of almost 1%. Largest declines in the quarter were seen in U.S. soup and Prego pasta sauces, which were partially offset by the continued strong quarterly performance of Rao's, which Mick spoke to earlier. Second quarter operating earnings decreased 15%, primarily reflecting gross profit impacts from inflation, including tariffs.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

Cost savings and supply chain productivity improvements were partial offsets to the inflationary pressures. On slide 25, snack results underperformed relative to our expectations this quarter, reflecting volume deleverage and higher costs. Net sales, both reported and organic, declined 6%, primarily due to volume and mix pressure while net price realization was flat. Declines in chips and pretzels, supply constraints in fresh bakery, and impacts from third-party partner and contract brands were significant drags to snacks performance in the quarter. Snacks operating margin declined 390 basis points, with 25% of the decline driven by poor bakery network performance and the rest as a result of the volume deleverage in both our plants and investment in marketing and SG&A. We forecast net sales performance for snacks to improve modestly in the second half versus Q2, with sequential improvement in operating margin as well.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

We expect stabilization as we make progress to improve bakery performance and capture productivity gains. Additionally, we are taking a comprehensive look at how to significantly improve the snacks margin profile, including simplifying SKU mix, price pack architecture, and optimizing our manufacturing network. As shown on Slide 26, despite near-term earnings pressure, we continued our strong, stable cash generation year-over-year. We returned $263 million to shareholders year to date through dividends and share repurchases. Capital expenditures of approximately $227 million were focused on growth and productivity. For fiscal 2026, we expect total CapEx of approximately 3.7% of net sales. Our net debt to Adjusted EBITDA leverage ratio at the end of the second quarter was 3.8 times, reflecting lower earnings. Reducing debt remains a key focus going forward, with specific emphasis on minimizing working capital and CapEx needs.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

In addition, we have suspended all share repurchases, including those for anti-dilution purposes. At the end of the second quarter, the company had approximately $561 million in cash and cash equivalents and approximately $1.8 billion available under our revolving credit facility. Based on the slower-than-anticipated recovery in snacks and incremental trade investments, we are updating our full year guidance ranges from those provided on December 9, 2025 to reflect a more cautious view of the balance of the year. Additionally, the newly imposed 10% global tariff under Section 122 will result in a modest increase to our second half tariff headwind. Lastly, our updated guidance does not reflect any potential impact regarding the Iran conflict.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

We now expect organic net sales to be in the range of down 2% to down 1%, Adjusted EBIT to be in the range of down 20% to down 17%, and Adjusted EPS in the range of $2.15 to $2.25, representing a range of down 26% to down 23% versus prior year. Regarding Q3, we expect the organic net sales, EBIT, and EPS growth profile to be relatively consistent with Q2. As a reminder, we benefited last year in Q3 from shipping ahead of the Sovos ERP conversion. This more than offsets the shift of volume from the storm this year out of Q2 into Q3. As shown on Slide 27, all other assumptions remain unchanged.

[Todd Cunfer, EVP and CFO at The Campbell's Company]

In closing, while our second quarter results were below our expectations and we've revised our full year outlook, we are acting with urgency and conviction, leveraging the strength of our brands and capabilities to improve performance and drive long-term value.

[Rebecca Gardy, Chief Investor Relations Officer at The Campbell's Company]

That concludes our prepared remarks for today's call. We encourage everyone to listen to our live question and answer webcast, which will begin at 9:00 A.M. Eastern today, March 11th, and which is accessible on the company's investor relations website. Thank you for your continued interest in The Campbell's Company.

Participants

Executives

• Mick Beekhuizen, CEO
• Rebecca Gardy, Chief Investor Relations Officer
• Todd Cunfer, EVP and CFO