Campbell's posted third-quarter net sales of $2.37 billion, a 4% drop from the same period a year earlier, as soft consumer demand and inflation-driven cost pressures weighed on both its meals and snacks divisions.
Adjusted earnings per share came in at $0.50, beating analyst expectations of $0.48, according to Reuters. On a reported basis, earnings per share rose to $0.41 from $0.22 a year earlier, when results had been pulled down by a $150 million impairment charge on the Snyder's of Hanover trademark.
The meals and beverages segment saw net sales fall 4%, with U.S. soup sales dropping 8%. The snacks segment also declined 4%, driven by weakness in salty snacks, crackers, and fresh bakery. Both segments saw lower volume and mix, partially offset by modest price gains, the company said.
Adjusted gross profit margin contracted 240 basis points to 27.7%, reflecting cost inflation and tariff-related supply chain expenses. Campbell's said the gross impact of tariffs weighed on operating earnings in both segments during the quarter.
"Our third quarter results were generally in-line with our expectations but remained under pressure, reflecting top-line softness and inflation-driven margin headwinds," President and CEO Mick Beekhuizen said in a statement. He added that the company sees early signs of progress in its snacks business and that leading meals and beverages brands including Campbell's, Rao's, and Swanson continue to benefit from at-home cooking trends.
Despite the top-line pressure, Campbell's reaffirmed its full-year fiscal 2026 guidance, projecting organic net sales to fall between 1% and 2% and adjusted earnings per share in the range of $2.15 to $2.25. The company had trimmed its initial fiscal-year forecast in March, according to The Wall Street Journal.
Campbell's also said it has now achieved approximately $200 million toward its fiscal 2028 cost-savings target of $375 million. The company said it intends to use those savings to help offset tariff and broader inflationary headwinds.
The results come as households have felt the pinch from higher gasoline prices tied to the Middle East conflict, adding to persistent inflation and pushing consumer confidence lower. Grocery prices rose 0.7% in April, the largest one-month increase in nearly four years, as energy costs pushed expenses across the food supply chain higher. For packaged food brands, the result has been a migration of budget-conscious shoppers toward store-brand options.
Campbell's fiscal year-to-date cash flow from operations stood at $839 million, compared with $872 million in the same period a year earlier.
