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 the Snacks category.

• Adjusted EPS was $0.74, down 8% from the prior year, and adjusted EBIT increased 2%, both in line with expectations despite margin pressure from cost inflation and higher interest expense.

• Rao's and Prego sauces outperformed, with Rao's expected to grow above 10% for the year and remain a key growth driver.

• The company remains focused on innovation, brand support, and cost-saving initiatives to drive growth and margin improvement in the second half.

• Updated guidance reflects a dynamic environment, slower-than-expected snacking recovery, and recent divestitures.

Financial highlights

• Reported net sales increased 9% year-over-year to $2,685M, with Sovos contributing a 13-point benefit; organic net sales declined 2%.

• Adjusted EBIT rose 2% to $372M, while adjusted EBIT margin fell to 13.9% from 14.8%.

• Adjusted EPS was $0.74, down 8% from $0.80; gross margin declined to 30.5% from 31.6% due to cost inflation and acquisition impact.

• Operating cash flow for the first half was $737M, up 8% year-over-year; capital expenditures reached $211M.

• Marketing and selling expenses rose 18% to $256M, mainly from acquisition and higher advertising.

Outlook and guidance

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

• Adjusted EBIT growth forecasted at 3%-5%, and adjusted EPS expected in the $2.95–$3.05 range, including a $0.01 dilutive impact from the Noosa divestiture.

• Cost savings target for the year increased to $120M, with ongoing productivity initiatives expected to offset inflation.

• Capital expenditures for FY25 expected at ~4.7% of net sales, with $485M projected for 2025.

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