Campbell's stock declined following the release of its third-quarter fiscal 2026 results. The company reported a 4% decrease in both reported and organic net sales to $2.4 billion, reflecting a general softness in demand. This performance, though generally in line with internal expectations, contributed to investor concerns regarding the company's financial health. The decline was primarily attributed to lower volume and mix, with a modest positive impact from net price realization.
The company's profitability also suffered, with adjusted EBIT decreasing by 24% to $274 million and adjusted EPS falling by 32% to $0.50 per share. These declines were largely driven by lower adjusted gross profit, which was impacted by significant cost inflation, other supply chain expenses, and the ongoing effect of tariffs. Despite these challenges, Campbell's noted some progress in its Meals & Beverages portfolio, with strong performance from brands like Campbell's, Rao's, and Swanson, and early signs of improvement in some snack segments.
For the full fiscal year 2026, Campbell's reaffirmed its previously updated guidance, projecting adjusted EPS to be between $2.15 and $2.25. This updated outlook, which was lowered in March, reflects a significant decrease of 26% to 23% compared to fiscal year 2025's $2.91. The company's organic net sales forecast also remained at a decline of 2% to 1%. These revised figures, down from an earlier projection of $2.40 to $2.55, indicate a more cautious view for the remainder of the year due to continued weakness in the snacks business and higher costs from tariffs and inflation.
Operational challenges included a 4% decrease in net sales for the snacks segment, driven by lower volume/mix, particularly in salty snacks, crackers, and fresh bakery products. Tariffs, specifically U.S. import tariffs and retaliatory duties from the European Union and Canada, continue to weigh on profitability. The company is accelerating cost-saving initiatives, having achieved $200 million in savings year-to-date towards a fiscal 2028 target of $375 million, to mitigate these cost headwinds and invest in its brands. Campbell's also highlighted that consumer trends show a focus on premiumization, flavor exploration, health and wellness, and at-home cooking, which its brand portfolio is attempting to capitalize on.
