Campbell's Reports Third Quarter Fiscal 2026 Results

• Net Sales decreased 4% to $2.4 billion on a reported and organic basis.
• Earnings Before Interest and Taxes (EBIT) increased to $239 million; Adjusted EBIT decreased 24% to $274 million.
• Earnings Per Share (EPS) increased to $0.41; Adjusted EPS decreased 32% to $0.50.
• Fiscal year-to-date cash flow from operations was $839 million.
• Reaffirms full-year fiscal 2026 guidance.

The Campbell's Company (NASDAQ:CPB) today reported results for its third quarter fiscal 2026 ended May 3, 2026. Unless otherwise stated, all comparisons are to the comparable period in fiscal 2025.

CEO Comments:

"Our third quarter results were generally in-line with our expectations but remained under pressure, reflecting top-line softness and inflation-driven margin headwinds," said Mick Beekhuizen, Campbell's President and Chief Executive Officer. "At the same time, we are encouraged by the progress we are making in several priority areas. In Meals & Beverages, our leading brands including Campbell's, Rao's, and Swanson continue to benefit from durable at-home cooking trends. In Snacks, we are seeing early signs of progress as we prioritize Goldfish's core of households with kids, improve execution in Pepperidge Farm fresh bakery, and are taking additional actions to strengthen our salty snacks portfolio. Across the company, we are focused on simplifying the business, accelerating productivity and cost savings, and creating fuel to invest behind our strongest opportunities. We are moving with urgency and remain confident in the long-term strength of our portfolio and our ability to create shareholder value."

Items Impacting Comparability

The table below presents a summary of items impacting comparability in each period. A detailed reconciliation of the reported (GAAP) financial information to the adjusted information is included at the end of this news release.

Third Quarter Results

Net sales decreased 4% to $2.4 billion, including a modest headwind from the divestiture of noosa. Organic net sales decreased 4% primarily driven by lower volume/mix, with positive net price realization.

Gross profit decreased 11% to $650 million. Gross profit margin decreased 190 basis points to 27.5%. Adjusted gross profit decreased 12% to $656 million. Adjusted gross profit margin decreased 240 basis points to 27.7%, driven primarily by cost inflation and other supply chain costs inclusive of the impact from tariffs, partially offset by supply chain productivity improvements and cost savings, as well as favorable net price realization.

Marketing and selling expenses decreased 1% to $214 million. Adjusted marketing and selling expenses increased 2% to $211 million primarily driven by marketing expenses.

Administrative expenses decreased 4% to $155 million. Adjusted administrative expenses decreased 1% to $149 million mainly driven by the benefit from cost savings initiatives and lower incentive compensation, partially offset by higher general administrative costs.

Other expenses were $8 million compared to $160 million in the prior year. Adjusted other income was $2 million compared to other expenses of $4 million.

EBIT increased 48% to $239 million versus the prior year which reflected a $150 million impairment charge. Adjusted EBIT decreased 24% to $274 million primarily due to lower adjusted gross profit.

Net interest expense of $80 million was consistent with prior year. The effective tax rate increased to 22.0% from the prior-year rate of 18.5%. The adjusted effective tax rate was 22.7%, consistent with the prior year.

EPS increased to $0.41 per share from $0.22 per share. Adjusted EPS decreased 32% to $0.50 per share reflecting lower adjusted EBIT.

Cash Flow and Shareholder Return

Cash flow from operations for the nine months ended May 3, 2026 was $839 million, compared to $872 million in the prior year. Capital expenditures year-to-date were $297 million compared to $296 million. In line with Campbell's commitment to return value to its shareholders, the company has paid $380 million year-to-date, primarily through cash dividends.

Cost Savings Program

In the third quarter, Campbell's delivered approximately $20 million in savings, bringing total cost savings achieved to $200 million pursuant to its fiscal 2028 target of $375 million. The company intends to use these savings as one of several levers to help offset tariff and broader inflationary headwinds.

Full-Year Fiscal 2026 Guidance:

The company is reaffirming its previously provided guidance for organic net sales, Adjusted EBIT and Adjusted EPS.

Fiscal 2026 guidance ranges are based on fiscal 2025 results excluding the 53rd week, which represented approximately 2% to Net Sales, 2% to Adjusted EBIT and $0.06 to Adjusted EPS.

The company's full-year fiscal 2026 guidance ranges are set forth in the table below:

Additional underlying guidance assumptions can be found in the accompanying investor presentation available at https://investor.thecampbellscompany.com/events-presentations.

Segment Operating Review

An analysis of net sales and operating earnings by reportable segment follows:

Meals & Beverages

Net sales decreased 4%. Organic net sales decreased 4%, driven by unfavorable volume/mix of 5% which was partially offset by favorable net price realization of 1%. The decline in organic net sales included a net headwind of approximately 1% as a result of the prior year SAP enterprise-resource planning system implementation for Sovos Brands, partially offset by the winter storm shipment delays late in the second quarter of this fiscal year. Sales of U.S. soup decreased 8% driven primarily by condensed and ready-to-serve soups.

Operating earnings decreased 16% primarily due to lower gross profit as a result of the gross impact of tariffs, cost inflation and other supply chain costs, and unfavorable volume/mix. Supply chain productivity improvements, favorable net pricing, and benefits from cost savings initiatives were partial offsets.

Snacks

Net sales, both reported and organic, decreased 4% primarily driven by unfavorable volume/mix of 6%, with 2% net price realization. Organic net sales declines were driven primarily by our salty portfolio, crackers and fresh bakery. Declines for third-party partner brands and contract manufacturing sales were a headwind, as well.

Operating earnings decreased 32% primarily due to lower gross profit as a result of elevated cost inflation and other supply chain costs, unfavorable volume/mix and gross impact of tariffs, partially offset by supply chain productivity improvements, favorable net price realization and benefits from cost savings initiatives.

Corporate

Corporate expense was $60 million in the quarter compared to $226 million in the prior year. The decrease was primarily due to the impairment charge in the prior year.

Conference Call and Webcast

Campbell's will host a question-and-answer session to discuss these results on Monday, June 8, 2026, at 9:00 a.m. Eastern Time. The earnings slide presentation and management's prepared remarks in both written and pre-recorded audio format are now available on the Events & Presentations section of Campbell's investor relations website at investor.thecampbellscompany.com. Participants calling from the U.S. & Canada may dial in using the toll-free phone number (800) 715-9871. Participants calling from outside the U.S. & Canada may dial in using phone number +1 (646) 307-1963. The conference access code is 8876056. A live listen-only audio webcast, as well as a replay, will be available on the company's investor relations website.

Reportable Segments

The Campbell's Company earnings results are reported as follows:

Meals & Beverages, which consists of soup, simple meals and beverages products in retail and foodservice in the U.S. and Canada. The segment includes the following products: Campbell's condensed and ready-to-serve soups; Swanson broth and stocks; Pacific Foods broth, soups and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; SpaghettiOs pasta; Campbell's gravies, beans and dinner sauces; Swanson canned poultry; V8 juices and beverages; Campbell's tomato juice; and as of March 12, 2024, Rao's pasta sauces, dry pasta, frozen entrées, frozen pizza and soups; Michael Angelo's frozen entrées and pasta sauces; and noosa yogurts. The noosa yoghurt business was sold on February 24, 2025. The segment also includes snacking products in foodservice and Canada, and beginning in fiscal 2026, the snacking and meals and beverages retail business in Latin America; and

Snacks, which consists of Pepperidge Farm cookies, crackers, fresh bakery and frozen products, including Goldfish crackers, Snyder's of Hanover pretzels, Lance sandwich crackers, Cape Cod potato chips, Kettle Brand potato chips, Late July snacks, Snack Factory pretzel crisps, and other snacking products in retail in the U.S. The segment also included the results of the Pop Secret popcorn business, which was sold on August 26, 2024.

Through the fourth quarter of fiscal 2025, the snacking and meals and beverages retail business in Latin America was managed under the Snacks segment. Beginning in fiscal 2026, the business is managed under the Meals & Beverages segment. Segment results have been adjusted retrospectively to reflect this change.

The company refers to the following products as our "leadership brands": Campbell's condensed and ready-to-serve soups; Chunky soups; Swanson broth, stocks and canned poultry; Pacific Foods broth, soups and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; V8 juices and beverages; Rao's pasta sauces, dry pasta, frozen entrées, frozen pizza and soups; Pepperidge Farm cookies, crackers and fresh bakery; Goldfish crackers; Snyder's of Hanover pretzels; Lance sandwich crackers; Cape Cod potato chips; Kettle Brand potato chips; Late July snacks; and Snack Factory pretzel crisps.

About The Campbell's Company

For more than 155 years, The Campbell's Company (NASDAQ:CPB) has been connecting people through food they love. Headquartered in Camden, N.J. since 1869, generations of consumers have trusted Campbell's to provide delicious and affordable food and beverages. Today, the company is a North American focused brand powerhouse, generating fiscal 2025 net sales of $10.3 billion across two divisions: Meals & Beverages and Snacks. Campbell's portfolio of 16 leadership brands includes: Campbell's, Cape Cod, Chunky, Goldfish, Kettle Brand, Lance, Late July, Pace, Pacific Foods, Pepperidge Farm, Prego, Rao's, Snack Factory pretzel crisps, Snyder's of Hanover, Swanson and V8. For more information, visit www.thecampbellscompany.com.

Forward-Looking Statements

This release contains "forward-looking statements" that reflect the company's current expectations about the impact of its future plans and performance on the company's business or financial results. These forward-looking statements, including any statements made regarding sales, EBIT and EPS guidance, rely on a number of assumptions and estimates that could be inaccurate, and which are subject to risks and uncertainties. The factors that could cause the company's actual results to vary materially from those anticipated or expressed in any forward-looking statement include: declines or volatility in financial markets, deteriorating economic conditions and other external factors, including the impact and application of new or changes to existing governmental laws, regulations, and policies; the risks associated with imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners; the risks related to the availability of, and cost inflation in, supply chain inputs, including labor, raw materials, commodities, packaging and transportation, including those related to ongoing geopolitical conflicts and tariffs; disruptions in or inefficiencies to the company's supply chain and/or operations, including reliance on key contract manufacturer and supplier relationships; the company's ability to execute on and realize the expected benefits from its strategy, including sales growth in and/or maintenance of its market share position in snacks, soups, sauces and beverages; the impact of strong competitive responses to the company's efforts to leverage brand power with product innovation, promotional programs and new advertising; the risks associated with trade and consumer acceptance of product improvements, shelving initiatives, new products and pricing and promotional strategies; changes in consumer demand for the company's products and favorable perception of the company's brands; the risk that the cost savings and any other synergies from the Sovos Brands, Inc. ("Sovos Brands") transaction may not be fully realized or may take longer or cost more to be realized than expected, including that the Sovos Brands transaction may not be accretive to the extent anticipated; the risks related to the La Regina transaction, including that the benefits from the transaction may not be fully realized or may take longer or cost more to be realized than expected; the ability to realize projected cost savings and benefits from cost savings initiatives and the integration of recent acquisitions; the risks related to the effectiveness of the company's hedging activities and the company's ability to respond to volatility in commodity prices; the company's ability to manage changes to its organizational structure and/or business processes, including selling, distribution, manufacturing and information management systems or processes; changing inventory management practices by certain of the company's key customers; a changing customer landscape, with value and e-commerce retailers expanding their market presence, while certain of the company's key customers maintain significance to the company's business; product quality and safety issues, including recalls and product liabilities; the possible disruption to the independent contractor distribution models used by certain of the company's businesses, including as a result of litigation or regulatory actions affecting their independent contractor classification; the uncertainties of litigation and regulatory actions against the company; a disruption, failure or security breach of the company's or the company's vendors' information technology systems, including ransomware attacks; the company's indebtedness and ability to pay such indebtedness; a change in outlook or downgrade in our public credit ratings; impairment to goodwill or other intangible assets; the company's ability to protect its intellectual property rights; the company's ability to attract and retain key talent; goals and initiatives related to, and the impacts of, climate change, including from weather-related events; the costs, disruption and diversion of management's attention associated with activist investors; increased liabilities and costs related to the company's defined benefit pension plans; unforeseen business disruptions or other impacts due to political instability, civil disobedience, terrorism, geopolitical conflicts, extreme weather conditions, natural disasters, pandemics or other outbreaks of disease or other calamities; and other factors described in the company's most recent Form 10-K and subsequent Securities and Exchange Commission filings. This discussion of uncertainties is by no means exhaustive but is designed to highlight important factors that may impact the company's outlook. The company disclaims any obligation or intent to update forward-looking statements in order to reflect new information, events or circumstances after the date of this release.

Reconciliation of GAAP to Non-GAAP Financial Measures

Third Quarter Ended May 3, 2026

The Campbell's Company (the "company") uses certain non-GAAP financial measures as defined by the Securities and Exchange Commission in certain communications. These non-GAAP financial measures are measures of performance not defined by accounting principles generally accepted in the United States and should be considered in addition to, not in lieu of, GAAP reported measures. Management believes that also presenting certain non-GAAP financial measures provides additional information to facilitate comparison of the company's historical operating results and trends in its underlying operating results, and provides transparency on how the company evaluates its business. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the company's performance. Management considers quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of the company's performance and trends in its underlying operating results. The adjustments on earnings may include but are not limited to items such as: unusual or non-recurring gains or charges; costs associated with cost savings and optimization initiatives; actuarial and curtailment gains or losses on pension and postretirement plans; unrealized mark-to-market gains or losses on outstanding undesignated commodity hedges; gains or losses on the extinguishment of debt; gains or losses on divestitures; costs associated with acquisitions; impairment charges or accelerated amortization; certain litigation expenses or recoveries; and costs or recoveries related to a cybersecurity incident. Depending upon facts or circumstances, management may change these adjustments. When these adjustments change, the company will provide updated definitions of its non-GAAP financial measures. When items no longer impact the company's current or future presentation of non-GAAP operating results, the company will remove these items from its non-GAAP definitions.

Organic Net Sales

Organic net sales are net sales excluding the impact of currency, acquisitions, divestitures and the additional week in fiscal 2025. Management believes that excluding these items, which are not part of the ongoing business, improves the comparability of year-to-year results. A reconciliation of net sales as reported to organic net sales follows.

Items Impacting Earnings

Adjusted Net earnings are net earnings excluding the impact of costs associated with cost savings and optimization initiatives, unrealized mark-to-market gains or losses on outstanding undesignated commodity hedges, costs associated with acquisitions, certain litigation expenses or recoveries, actuarial and curtailment gains or losses on pension and postretirement plans, impairment charges, costs or recoveries related to a cybersecurity incident, accelerated amortization, gains or losses on divestitures, and the additional week in fiscal 2025. Management believes that financial information excluding certain items that are not considered to reflect the ongoing operating results, such as those listed below, improves the comparability of year-to-year results. Consequently, management believes that investors may be able to better understand its results excluding these items.

The following items impacted earnings:

The following tables reconcile financial information, presented in accordance with GAAP, to financial information excluding certain items: