Campbell's Reports First Quarter Fiscal 2026 Results; Reaffirms Full-Year Fiscal 2026 Guidance

• Net Sales decreased 3% to $2.7 billion and decreased 1% on an organic basis.
• Earnings Before Interest and Taxes (EBIT) decreased to $336 million. Adjusted EBIT decreased 11% to $383 million.
• Earnings Per Share (EPS) decreased to $0.65. Adjusted EPS decreased 13% to $0.77.
• Cash flow from operations was $224 million; returned $144 million to shareholders including $120 million in dividends.
• Entered into definitive agreements to acquire a 49% interest in La Regina, the producer of Rao's tomato-based pasta sauces. Acquisition solidifies Campbell's long-term strategic partnership with La Regina and is expected to fuel Rao's continued growth.
• Reaffirms full-year fiscal 2026 guidance.

The Campbell's Company (NASDAQ:CPB) today reported results for its first quarter fiscal 2026 ended November 2, 2025. Unless otherwise stated, all comparisons are to the same period of fiscal 2025.

CEO Comments:

Mick Beekhuizen, Campbell's Chief Executive Officer said, "Our first quarter performance was in line with our expectations reflecting sharpened in-market execution in a dynamic operating environment. Consumers remain intentional in their shopping behaviors with at-home-cooking trends continuing to benefit our brands within our Meals & Beverages portfolio that deliver quality, convenience and value. Additionally, our expanded partnership with La Regina strengthens our ability to deliver on the Rao's growth opportunity. While our Snacks business continues to weather category softness, our brands remain highly relevant. Across our portfolio, we continue to focus on quality, value and evolving consumer preferences with elevated brand support and innovation. Simultaneously, our teams are making great progress on cost savings and productivity initiatives to help offset inflation and continue to invest in our brands. We are moving quickly and with a continued focus on delivering today while we build for tomorrow."

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.

First Quarter Results

Net sales in the quarter decreased 3% to $2.7 billion. Organic net sales, which exclude the impact from divestitures, decreased 1% to $2.7 billion primarily driven by lower volume/mix, partially offset by favorable net price realization.

Gross profit decreased to $792 million from $867 million. Gross profit margin was 29.6% compared to 31.3%. Adjusted gross profit decreased to $801 million from $871 million. Adjusted gross profit margin decreased 150 basis points to 29.9% mainly driven by cost inflation and other supply chain costs, the gross impact of tariffs and unfavorable volume/mix, partially offset by cost savings and supply chain productivity improvements and favorable net price realization.

Marketing and selling expenses, which represented approximately 9% of net sales, increased 1% to $253 million. Adjusted marketing and selling expenses decreased 2% to $237 million primarily driven by lower selling expenses, the benefit from cost savings initiatives and lower incentive compensation, partially offset by higher marketing expenses.

Administrative expenses decreased 5% to $167 million. Adjusted administrative expenses decreased 9% to $150 million mainly driven by the benefit from cost savings initiatives and lower incentive compensation.

Other expenses were $9 million compared to $43 million. Adjusted other expenses were $7 million compared to $9 million.

EBIT decreased to $336 million from $367 million. Adjusted EBIT decreased 11% to $383 million primarily due to lower adjusted gross profit, partially offset by lower adjusted administrative expenses and lower adjusted marketing and selling expenses.

Net interest expense decreased to $80 million from $83 million mainly driven by lower levels of debt. The effective tax rate increased to 24.2% compared to 23.2% and the adjusted effective tax rate was 24.1% compared to 23.5%. Excluding items impacting comparability, the adjusted effective tax rate increased 60 basis points primarily due to the excess tax benefits in the prior-year and shortfalls in the current year associated with the vesting of stock-based compensation awards, partially offset by the favorable resolution of certain state tax matters in the current year.

EPS decreased to $0.65 per share from $0.72 per share. Adjusted EPS decreased 13% to $0.77 per share primarily reflecting lower adjusted EBIT.

Cash Flow and Shareholder Return

Cash flow from operations for the quarter ended November 2, 2025 was $224 million, compared to $225 million in the prior-year quarter. The decrease was primarily due to lower cash earnings mostly offset by changes in working capital. Capital expenditures in the quarter were $127 million compared to $110 million. In line with Campbell's commitment to return value to its shareholders, the company has paid $120 million of cash dividends and repurchased common stock of approximately $24 million in the first quarter of fiscal 2026. As of November 2, 2025, the company had approximately $174 million remaining under its anti-dilutive share repurchase program in addition to approximately $301 million remaining under its September 2021 strategic share repurchase program.

Cost Savings Program

In the first quarter, Campbell's delivered approximately $15 million in savings, bringing total cost savings achieved to $160 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 headwinds.

Acquisition of La Regina

Campbell's has entered into definitive agreements to acquire a 49% interest in La Regina di San Marzano di Antonio Romano S.p.A. and La Regina Atlantica, LLC (together, La Regina), the privately held maker of Rao's tomato-based pasta sauces, for total consideration of $286 million to be paid in two tranches. Based in Scafati, Italy, La Regina was founded in 1972 and has been a Rao's partner since 1993. La Regina also operates a facility in the U.S. in Alma, Georgia. The transaction strengthens the partnership between Campbell's and La Regina, ensuring Rao's continued commitment to the highest quality products while accelerating innovation and new product development.

The company expects the transaction, which is anticipated to close in the second half of fiscal 2026, to be neutral to the reaffirmed guidance for fiscal 2026 adjusted EPS. Further details on the acquisition can be found in the company's Form 8-K filed today with the Securities & Exchange Commission.

Full-Year Fiscal 2026 Guidance:

Based on the company's first quarter performance, Campbell's is reaffirming its full-year fiscal 2026 guidance ranges provided on September 3, 2025. Fiscal 2026 guidance ranges are based on the exclusion of the additional week in fiscal 2025, which represented approximately 2% to net sales, 2% to adjusted EBIT and $0.06 to adjusted EPS.

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

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

Segment Operating Review

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

Meals & Beverages

Net sales in the quarter decreased (4)%. Excluding the impact of the noosa divestiture, organic net sales decreased 2% mainly driven by declines in U.S. soup, Canada, SpaghettiOs, Pace Mexican sauces and V8 beverages, partially offset by gains in Rao's. Sales were impacted by volume/mix declines of 3%, partially offset by favorable net price realization of 1%. Sales of U.S. soup decreased 2% primarily due to decreases in ready-to-serve soups and condensed soups, partially offset by an increase in broth.

Operating earnings in the quarter decreased 13% primarily due to lower gross profit and the impact of the noosa divestiture. Gross profit margin decreased mainly due to the gross impact of tariffs, cost inflation and other supply chain costs and unfavorable volume/mix, partially offset by cost savings and supply chain productivity improvements and favorable net price realization.

Snacks

Net sales in the quarter decreased 2%. Excluding the impact of the Pop Secret divestiture, organic net sales decreased 1% driven primarily by declines in third-party partner and contract brands, Snyder's of Hanover pretzels, fresh bakery, Goldfish crackers and Cape Cod potato chips partially offset by gains in Pepperidge Farm cookies. Sales were impacted by volume/mix declines of 3%, partially offset by favorable net price realization of 2%.

Operating earnings in the quarter decreased 10% primarily due to lower gross profit. Gross profit margin decreased mainly due to cost inflation and other supply chain costs, the gross impact of tariffs and unfavorable volume/mix, partially offset by cost savings and supply chain productivity improvements and favorable net price realization.

Corporate

Corporate expense was $81 million in the quarter compared to $106 million in the prior year. The decrease was primarily due to the loss from the sale of the Pop Secret popcorn business in the prior year.

Conference Call and Webcast

Campbell's will host a conference call to discuss these results on Tuesday, December 9, 2025, at 8:00 a.m. Eastern Time. A copy of management's prepared remarks and earnings presentation is now available on the Events & Presentation section of Campbell's investor relations website at https://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 3233974. In addition to dial-in, access to 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 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 conditions to the completion of the transaction may not be satisfied, any regulatory approvals required for the transaction may not be obtained on the schedule or terms expected, the closing of the transaction may not occur or be delayed, and 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; impairment to goodwill or other intangible assets; the company's ability to protect its intellectual property rights; increased liabilities and costs related to the company's defined benefit pension plans; 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; the company's indebtedness and ability to pay such indebtedness; 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

First Quarter Ended November 2, 2025

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 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, certain litigation expenses or recoveries, costs or recoveries related to a cybersecurity incident, costs associated with acquisitions, actuarial gains or losses on pension and postretirement plans, accelerated amortization, gains or losses on divestitures, impairment charges 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:

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