The Campbell's Company CPB reported second-quarter fiscal 2026 results, with the top and bottom lines missing the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines.
CPB’s Quarterly Performance: Key Metrics and Insights
Adjusted earnings per share (EPS) were 51 cents, down 31% year over year, due to lower adjusted earnings before interest and taxes (“EBIT”). The bottom line also missed the Zacks Consensus Estimate of 57 cents.
The Campbell's Company Price, Consensus and EPS Surprise
The Campbell's Company price-consensus-eps-surprise-chart | The Campbell's Company Quote
Net sales of $2,564 million decreased 5% year over year, and missed the Zacks Consensus Estimate of $2,606 million. Organic net sales, which exclude divestitures, decreased 3% to $2.6 billion, due to lower volume and unfavorable product mix, while net price realization remained neutral.
The company’s adjusted gross profit fell to $710 million from $815 million, which missed our estimate of $753.6 million. The adjusted gross profit margin declined 270 basis points (bps) to 27.7%. The margin decrease was primarily due to cost inflation, supply-chain expenses, tariff impacts and unfavorable volume/mix, partly offset by cost-saving measures, supply-chain productivity gains and modest price realization.
Adjusted marketing and selling expenses decreased 3% to $248 million, primarily due to reduced selling expenses and ongoing cost-reduction initiatives.
Adjusted administrative expenses dipped 3% to $152 million, reflecting cost-saving efforts, partially offset by higher benefit-related costs and inflationary pressures.
The adjusted EBIT dropped 24% to $282 million, mainly owing to reduced adjusted gross profit, somewhat offset by lower adjusted administrative expenses and adjusted marketing and selling expenses. We expected an adjusted EBIT to drop 17% for the quarter.
Decoding CPB’s Segmental Performance
Meals & Beverages: Net sales decreased 4% to $1,650 million for the quarter. Excluding the noosa divestiture, organic net sales declined 2%, caused by lower sales in U.S. soup, Prego pasta sauces, foodservice and V8 beverages, partially offset by growth in Rao’s. Overall sales reflected a 2% decline in volume/mix, partially offset by 1% favorable price realization. Sales were also affected by an estimated 1% headwind from January storm-related shipment delays. We anticipated the segment to decline 3.7% in the fiscal second quarter.
Snacks: Net sales decreased 6% to $914 million in the quarter. Organic net sales also declined 6%. The decline was caused largely by weaker demand for chips and pretzels, as well as supply constraints in fresh bakery products and third-party partner brands, including contract manufacturing. Volume and mix reduced sales by 6%, while price realization remained neutral. We expected the segment to decrease 1.4% in the reported quarter.
CPB’s Other Financial Metrics
As of the end of the reported quarter, Campbell's had cash and cash equivalents of $561 million and a total debt of $7,075 million.
Cash flow from operations for the six months ended Feb. 1, 2026, was $740 million. Capital expenditures were $227 million in the said period. CPB paid $237 million in cash dividends and repurchased nearly $26 million in shares during the period.
As of Feb. 1, 2026, the company had $172 million remaining under its September 2024 anti-dilutive share repurchase program, in addition to $301 million remaining under the September 2021 strategic share repurchase program.
In the fiscal second quarter, Campbell’s delivered $20 million in cost savings, bringing total savings to $180 million toward its fiscal 2028 target of $375 million.
CPB’s Fiscal 2026 Guidance
Campbell’s is lowering its full-year fiscal 2026 guidance. Organic net sales are now expected to range from a decline of 1% to 2% year over year compared with the prior outlook of 1% decline to 1% rise. Adjusted EBIT is projected to decrease 17% to 20%, compared with the previous expectation of a 9% to 13% decline.
Adjusted EPS is now expected to fall 23% to 26%, implying a range of approximately $2.15 to $2.25, compared with the prior forecast of $2.40 to $2.55.
Shares of this Zacks Rank #4 (Sell) company have lost 18.9% in the past three months compared with the industry's decline of 4.5%.
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Stocks to Consider
Mama's Creations, Inc. MAMA manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures. Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average.
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The Zacks Consensus Estimate for Hershey’s current financial-year sales and earnings indicates growth of 4.8% and 30.1%, respectively, from the prior-year reported levels.
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