The Campbell’s Company (CPB) Q2 2025 earnings summary

Executive summary

• Net sales rose 9% year-over-year to $2.685 billion, driven by the Sovos Brands acquisition, while organic net sales declined 2% due to softness in Snacks categories.

• Q2 earnings met expectations, but top-line growth was slightly below target due to weaker Snacks performance.

• 10 of 16 Leadership Brands held or grew share, with Meals and Beverages showing strength and Snacks facing margin and volume challenges.

• Rao's sauce delivered high single-digit net sales growth in Q2 and is expected to grow slightly above 10% for the year.

• Continued focus on disciplined capital allocation and maintaining healthy margins.

Financial highlights

• Adjusted EBIT increased 2% year-over-year to $372 million; adjusted EBIT margin fell to 13.9% from 14.8%.

• Adjusted EPS was $0.74, down 8% from $0.80 in Q2 FY24 due to higher interest expense from increased debt.

• Gross profit increased, but gross margin declined to 30.5% from 31.6% due to cost inflation and acquisition impact.

• Operating cash flow year-to-date was $737 million, up from $684 million; $283 million returned to shareholders via dividends and buybacks.

• Net interest expense rose to $88 million from $46 million, reflecting higher debt levels post-acquisition.

Outlook and guidance

• Full-year reported net sales expected to increase 6%-8%, with organic net sales projected to be down 2% to flat.

• Adjusted EBIT growth forecasted at 3%-5%; adjusted EPS guidance set at $2.95 to $3.05.

• FY2025 cost savings target raised to $120 million; ongoing initiatives expected to deliver $250 million in annual savings by 2028.

• Guidance reflects divestitures of Pop Secret and noosa businesses and continued category softness.

• Guidance does not include potential impacts from tariffs or regulatory changes.