Campbell's Posts 1% Revenue Gain in Q4

Key Points

• Q4 revenue increased 1% to $2.3 billion, while organic revenue declined 3%.

• Adjusted earnings per share (EPS) slipped 2% to $0.62.

• Fiscal 2026 guidance indicates a 12%–18% adjusted EPS decline, mainly due to tariff-related cost pressures.

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Campbell's (NASDAQ:CPB), a leading U.S. food producer known for its soups, snacks, and packaged foods, reported its fourth-quarter and full-year fiscal 2025 earnings on Sept. 3, 2025. Revenue rose 1% year over year to $2.32 billion, helped by an extra week in the reporting period and the recent Sovos Brands acquisition. However, organic revenue -- which adjusts for the extra week and portfolio changes -- declined by 3%. Adjusted earnings per share came in at $0.62, down 2% from the prior year.

The results were slightly ahead of the company's modest expectations for the quarter, but challenges remain, especially with organic sales declines and profit margin pressures. Management issued a cautious outlook for fiscal 2026, guiding for a 12%–18% decline in adjusted EPS amid rising input costs and tariffs.

Source: Campbell's. Note: Fiscal 2025's fourth quarter ended on Aug. 3, 2025. Fiscal 2024's Q4 ended on July 28, 2024.

Business overview and focus areas

Campbell's operates a diverse business with two main segments, Meals & Beverages and Snacks, with products sold in over 150 countries. Its best-known offerings include soups and sauces under the Campbell’s brand, bakery snacks like Goldfish crackers and Pepperidge Farm cookies, and premium products such as Rao’s pasta sauces, which it acquired through Sovos Brands.

Recently, the company has focused on acquiring premium brands for growth and divesting lower-priority operations. The $2.899 billion acquisition of Sovos Brands in November 2024 brought Rao’s, Michael Angelo’s, and Noosa into the portfolio. At the same time, Campbell's exited the Pop Secret popcorn and sold off the Noosa yogurt business in early 2025. Managing supply chain and raw material costs, responding to changing consumer preferences, and investing in capacity and network optimization are also key to its strategy.

Quarter details: Financial and operational developments

Campbell's reported a modest 1% rise in net sales (GAAP) to $2.32 billion. This increase was mainly due to two one-time factors: an extra “53rd week” in fiscal 2025, because of the reporting calendar, and the first full quarter of Sovos Brands’ results. When adjusting for these items and the impact of divestitures, organic revenue actually declined 3% compared to the same period last year, as underlying demand remained soft.

By segment, Meals & Beverages posted flat sales on a reported (GAAP) basis. However, organic revenue dropped by 3% due to weaker demand for Rao’s pasta sauces and U.S. soup. Segment operating earnings slipped 5% to $200 million, reflecting cost inflation and the impact of newly imposed tariffs. On the Snacks side, reported sales edged up 2% (helped by pricing), while organic sales fell 2%, as broader market softness affected volumes for key products like Snyder’s of Hanover pretzels and Goldfish crackers. The Snacks business sustained flat operating earnings despite ongoing pressure.

Gross profit margin, which measures profit divided by sales and shows how efficiently products are produced and sold, improved to 30.4% on a reported basis. However, it fell 0.9 percentage points on an adjusted basis, reflecting cost savings and inflation. Marketing and selling expenses climbed 7% (GAAP) as Campbell's increased promotional support for brands facing tough competition. The company saved $145 million under its cost reduction program. It also raised its long-term savings target by 50% to $375 million by fiscal 2028, aiming to help offset ongoing input cost and tariff headwinds.

One-off events included the benefit of the extra week, which inflated comparative results by roughly 7%, and the near-term drag from the expected reversal of shipments related to the Sovos Brands’ enterprise-system rollout earlier in the year. Divestitures also reduced both reported revenue and earnings, with the Pop Secret exit subtracting about three percentage points from organic Snacks segment sales. Share repurchases were modest at $62 million, with about $500 million in remaining capacity as of August 3, 2025.

Management faced wide-ranging pressures in the quarter. Tariffs alone were estimated to reduce adjusted EPS by about $0.02. Looking ahead, the company expects tariffs to account for nearly two-thirds of the anticipated decline in adjusted EPS for fiscal 2026, with only partial mitigation possible even after aggressive cost-cutting. Capital expenditures, which are long-term investments in factories and systems, came in at $426 million -- lower than prior guidance.

How Campbell's products drive results

Campbell's Meals & Beverages portfolio includes condensed and ready-to-serve soups, broths, pasta sauces like Rao’s (a premium, tomato-based sauce brand), shelf-stable juices, and simple meals such as Prego sauces and Swanson broths.

The Snacks segment contributed 41% of sales in fiscal 2025 and is anchored by Goldfish crackers (baked snack crackers), Pepperidge Farm cookies, Snyder's of Hanover pretzels, and Kettle Chips. Products in the Snacks group faced a 5% volume decline. Ongoing sluggishness in snacks is a priority for management, which plans to invest in product innovation and increased marketing to drive renewed interest and volume growth.

Looking ahead: Guidance and investor watchpoints

Campbell's management issued a notably cautious outlook for fiscal 2026. Adjusted EBIT is projected to decline 9%–13% on a comparable 52-week basis. Adjusted EPS is expected to fall to $2.40–$2.55 (a 12%–18% reduction versus the $2.91 baseline), largely due to the ongoing impact of tariffs and divestitures. Organic sales are forecast to be flat to down 1%, pointing to limited real growth in the near term. Management expects $70 million in new cost savings and plans to maintain capital expenditures around 4% of net sales, in line with recent years, as indicated in company guidance.

For investors following the company, the main issues to watch will be Campbell's progress on mitigating tariff and supply chain cost pressures, the effectiveness of innovation and brand marketing in lifting Snacks volumes, and developments in its brand portfolio following the Sovos Brands integration. Customer concentration also remains a risk: Walmart accounts for about 22% of total sales, with the top five customers representing nearly half of the company's revenue in fiscal 2024.

Note: Revenue and net income are presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends Campbell's. The Motley Fool has a disclosure policy.