Campbell's Q2 2025: Contradictions on Snack Performance, Goldfish Strategy, and Rao's Growth

These are the key contradictions discussed in The Campbell's Company latest 2025Q2 earnings call, specifically including: Snack Category Performance and Market Recovery Expectations, Strategic Focus on Goldfish and Other Snack Brands, Snacks Category Recovery Timeline, and Growth Expectations for Rao's Brand:



Snacking Category Performance and Challenges:
- Campbell's snacks organic net sales declined 3%, with key brands like Pepperidge Farm cookies and Snyder's of Hanover pretzels experiencing 1% consumption decline.
- The snacks division faced weaker-than-expected category recovery amid competitive environment, leading to a revision in full-year guidance.

Soup and Broth Segment Trends:
- The company's soups portfolio saw increased at-home cooking activity, with condensed cooking and broth categories showing growth.
- However, eating soup categories slightly weakened, and private label recovery is expected to pressure share in the second half.

Campbell's Leadership Brands and Share:
- Approximately 90% of Campbell's enterprise net sales come from Leadership Brands, which remained mostly flat in share performance.
- Despite challenges, key brands like Swanson broth and Campbell's condensed cooking products showed growth, while others like Snyder's of Hanover faced softer demand.

Financial and Margin Challenges in Snacks Division:
- The Snacks division's margin fell 370 basis points, driven by unfavorable mix and operational headwinds in the Fresh Bakery business.
- Despite planned promotional investments for holidays, adjusted marketing and selling expenses increased by 25%, impacting profitability.

Rao's Brands Growth and Strategic Importance:
- Rao's sauce reported high-single-digit net sales growth in Q2 and low-teens growth for the first half, with exceptional brand equity metrics.
- Accelerated brand awareness initiatives and innovation are expected to support long-term growth, with Rao's expected to become the next billion-dollar brand.