The Campbell’s Company (CPB) 4th Annual Evercore ISI Consumer and Retail Conference summary

Portfolio transformation and strategic focus

• Portfolio now features 50% snacking, with Sovos and Rao’s driving growth; soup is less than 25% of the mix.

• Emphasis on power brands, which make up two-thirds of the business and are positioned in premium and differentiated segments.

• Integration of Sovos and Rao’s is seen as a major growth lever for meals and beverages.

• Consistent delivery on commitments, with 18 of the last 19 quarters meeting expectations.

• Company is at an inflection point, shifting from macro challenges to execution and brand strength.

Snacking business performance and outlook

• Snacking delivered an 8% CAGR over the last three years, though recent quarters have seen slower growth.

• Slowdown attributed to cycling high growth, some trade down, and lower purchase frequency, but category remains resilient.

• Strategy remains focused on innovation, differentiated experiences, and vigilant pricing and promotion.

• Limited time offers and new products like Air Fried Kettle and Old Bay Goldfish are driving excitement.

• Expectation for normalization to 3% growth in fiscal 2025, with improvement anticipated into the holiday season.

Promotion, pricing, and margin management

• Promotional activity is returning to historical norms, with focus on effective, ROI-driven promotions.

• Supply chain improvements have enabled more efficient and targeted promotions.

• No significant margin erosion expected from increased promotions; gross margins remain healthy.

• Margin roadmap for snacking includes better mix, network optimization, and DSD network improvements.

• EBIT margin targets: ~15% this year, 16% next year, and 17% longer term, driven by ongoing productivity and network changes.