Campbell's Q1 Earnings Show Sales Beat, EPS Tops Forecasts
Campbell's Q1 earnings had sales beat but adjusted EPS fell amid tariffs and weak snacks; reaffirmed FY2026 guidance shifts trader focus to margins.
KEY TAKEAWAYS
- Net sales of $2.68-$2.77 billion beat Street estimates despite a roughly 3% decline.
- Adjusted EPS was $0.77, down 13% year-over-year yet topped consensus.
- Company reaffirmed FY2026 adjusted EPS guidance of $2.40-$2.55, keeping outlook intact.
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Campbell Soup Company (NYSE:CPB) reported Q1 earnings on Dec. 9, 2025, with sales exceeding Street estimates while adjusted earnings per share fell. The company reaffirmed full-year guidance, citing inflation, tariffs, and weak snack demand as challenges.
Quarter Results, Guidance, and Cash Flow
For the quarter ended Nov. 2, 2025, Campbell posted adjusted EPS of $0.77, down 13% year-over-year, and net sales between $2.68 billion and $2.77 billion, a roughly 3% decline that still surpassed analyst expectations. Adjusted earnings before interest and taxes (EBIT) fell 11% to $383 million, while GAAP net earnings dropped 11% to $218 million. Adjusted gross profit declined but was partly offset by lower selling, general, and administrative expenses.
The company reaffirmed full-year adjusted EPS guidance of $2.40 to $2.55, expects adjusted EBIT to decline 9% to 13%, and projects organic net sales to be flat to up 1%. This outlook excludes an extra week in fiscal 2025, which accounted for about 2% of net sales, adjusted EBIT, and $0.06 of adjusted EPS. CEO Mick Beekhuizen said, "Consumers remain intentional in their shopping behaviors with at-home-cooking trends continuing to benefit our brands."
Operating cash flow was $120 million for the quarter. Campbell returned $224 million to shareholders, including $144 million in dividends, and realized approximately $27 million in cost savings.
Segment Performance and La Regina Acquisition
In the Meals & Beverages segment, net sales declined 4%, with organic sales down excluding the Noosa divestiture. Operating earnings fell 13%, driven by volume and mix declines in SpaghettiOs, Pace, and V8, partially offset by gains at Rao's.
The Snacks segment saw net sales fall 2% and operating earnings drop 10%. Volume and mix weakness at Cape Cod, Snyder's of Hanover, and fresh bakery were partly offset by strength in Pepperidge Farm cookies and Goldfish.
Campbell signed a definitive agreement to acquire a 49% stake in La Regina, the producer of Rao's tomato-based pasta sauces, for $286 million. The company described the acquisition as a strategic move to deepen the partnership and support Rao's growth. The deal is expected to close.
