Campbell's Reports 1% Revenue Increase in Q4

Earnings Report Overview: Campbell's reported a 1% increase in revenue to $2.32 billion for fiscal 2025, aided by an extra week in the reporting period and the acquisition of Sovos Brands, but organic revenue fell by 3%. Adjusted earnings per share decreased by 2% to $0.62, with management forecasting a 12%–18% decline in adjusted EPS for fiscal 2026 due to rising costs and tariffs.

Segment Performance: The Meals & Beverages segment saw flat sales but a 3% decline in organic revenue, while the Snacks segment reported a 2% increase in sales but also faced a 2% drop in organic sales. Overall, the Snacks business experienced a 5% volume decline, prompting management to focus on product innovation and marketing.

Cost Management and Strategy: Campbell's improved its gross profit margin to 30.4% but faced pressures from inflation and tariffs, which are expected to significantly impact future earnings. The company is implementing a cost reduction program with a new savings target of $375 million by fiscal 2028.

Cautious Outlook and Risks: Management issued a cautious outlook for fiscal 2026, predicting flat to slightly declining organic sales and emphasizing the need to address tariff impacts and supply chain costs. Customer concentration remains a risk, with Walmart accounting for about 22% of total sales.