The Campbell’s Company (CPB) Q1 2026 earnings summary

Executive summary

• Net sales declined 3% year-over-year to $2.7 billion, with organic net sales down 1% and consumption down 2%, mainly due to retailer inventory build and divestitures, partially offset by favorable pricing.

• Adjusted EBIT fell 11% to $383 million and adjusted EPS decreased 13% to $0.77, reflecting cost inflation, tariffs, and supply chain costs, despite productivity gains.

• Leadership brands held or grew share for the eighth consecutive quarter, with meals and beverages benefiting from at-home cooking trends, while snacks faced ongoing pressure.

• The company reaffirmed its fiscal 2026 guidance, including expected tariff impacts, mitigating actions, and the effect of recent divestitures.

• Entered agreement to acquire 49% of La Regina, Rao's key tomato sauce supplier, for $286 million, with an option to acquire the remaining 51%.

Financial highlights

• Net sales were $2.7 billion, down 3% year-over-year; organic net sales declined 1%.

• Adjusted gross profit margin decreased 150 basis points to 29.9%, with tariffs and inflation as key drivers.

• Adjusted EBIT was $383 million, down 11%; adjusted EPS was $0.77, down 13%.

• Operating cash flow was $224 million; capital expenditures were $127 million.

• Net interest expense decreased to $80 million; cash and cash equivalents at quarter-end were $168 million.

Outlook and guidance

• Fiscal 2026 guidance reaffirmed: organic net sales expected to be flat to up 1%, adjusted EBIT down 13% to 9%, and adjusted EPS down 18% to 12% ($2.40–$2.55).

• Gross tariffs expected to be about 4% of cost of product sold, with 60% from Section 232 tariffs; company expects to mitigate about 60% of tariff impact through cost savings, supplier collaboration, and selective pricing.

• Divestitures of Pop Secret and noosa expected to reduce net sales by 1% and EPS by ~$0.04 for FY26.

• Capital expenditures projected at ~3.7% of net sales; effective tax rate ~24%.

• La Regina acquisition expected to be neutral to fiscal 2026 adjusted EPS.