Campbells 2025 Q3 Earnings Misses Targets as Net Income Falls 50%

Campbell's (CPB) reported its fiscal 2025 Q3 earnings on June 2nd, 2025. The company missed expectations, with net income declining by 50% compared to the previous year. Guidance for fiscal 2025 adjusted earnings is at the low end of the range, primarily due to a slower recovery in the Snacks business. Campbell's expects adjusted EPS to be $2.95 to $3.05, reflecting ongoing efforts to manage costs and improve operational efficiency. The fiscal year comprises 53 weeks, with an estimated benefit of approximately 2 points of growth to reported net sales.

Revenue
Campbell's reported a total revenue increase of 4.5%, reaching $2.48 billion in Q3 2025, compared to $2.37 billion in Q3 2024. The Meals & Beverages segment contributed $1.46 billion, reflecting growth from U.S. soups and Rao's pasta sauces, while Snacks added $1.01 billion, impacted by declines in Goldfish crackers and Snyder's of Hanover pretzels. Corporate income and restructuring charges were reported at zero, maintaining the total revenue figure of $2.48 billion.

Earnings/Net Income
Campbell's EPS dropped by 51.1% to $0.22 in Q3 2025 from $0.45 in Q3 2024. Net income also decreased significantly, falling 50.4% to $66 million from $133 million in the same quarter of the previous year. The EPS performance indicates a challenging quarter for Campbell’s.

Price Action
The stock price of Campbell's has edged down 1.72% during the latest trading day, has edged up 2.24% during the most recent full trading week, and has dropped 6.06% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing CPB stock when revenues exceed expectations and holding for 30 days proved ineffective, yielding a loss of 27.92%. The negative Sharpe ratio of -1.35 and substantial maximum drawdown of -29.52% highlight the strategy's inability to deliver positive returns, underperforming the benchmark and demonstrating significant risk. With volatility peaking at 27.05%, the strategy further illustrates its unstable nature, resulting in poor performance overall.

CEO Commentary
Mick Beekhuizen, President and CEO, commented that the third quarter earnings exceeded expectations, largely due to strong performance in the Meals & Beverages segment and favorable shipment timing. However, he acknowledged mixed results in the Snacks segment, citing category softness and competitive pressures. He emphasized refining plans for better in-market performance and mitigating tariff impacts, while expressing confidence in the long-term growth potential of Snacks through productivity and cost savings initiatives.

Guidance
For fiscal 2025, Campbell's anticipates adjusted earnings at the lower end of the guidance range, largely due to sluggish recovery in the Snacks division. The company estimates tariff-related costs could impact earnings by $0.03 to $0.05 per share, although this is not factored into the guidance. The fiscal year includes 53 weeks, which is expected to contribute approximately two points of growth to reported net sales. Capital expenditures are projected to be around 4.5% of net sales.

Additional News
Recently, Campbell’s announced the appointment of Aaron Gwinner as Chief Digital & Technology Officer, aiming to boost digital transformation and technology initiatives. Additionally, the Campbell’s Foundation awarded grants to strengthen community ties, reflecting the company's commitment to social responsibility. In corporate governance, Campbell’s declared a quarterly dividend of $0.39 per share, payable on August 4th, reinforcing its dedication to returning value to shareholders.