Campbells 2026 Q1 Earnings Beats Expectations with 5.48% EPS Surprise

Campbell’s (CPB) reported fiscal 2026 Q1 results on December 9, 2025, with adjusted EPS of $0.77, surpassing estimates by 5.48%, and revenue of $2.68 billion, slightly exceeding expectations. The company reaffirmed full-year guidance despite organic net sales declining 1% year-over-year.

Revenue

The Meals & Beverages segment generated $1.67 billion in revenue, while the Snacks division contributed $1.01 billion. Corporate income and restructuring charges were not applicable, resulting in total revenue of $2.68 billion, a 3.4% decline from $2.77 billion in the prior year.

Earnings/Net Income

Campbell’s reported an adjusted EPS of $0.77, a 5.48% beat over estimates, though net income fell to $194 million, reflecting a 11.0% year-over-year decline. The EPS decline underscores margin pressures from tariffs and inflation.

Price Action

Post-earnings, CPB shares dropped 6.88% in the latest trading day, 4.75% for the week, and 5.29% month-to-date, signaling investor caution.

Post-Earnings Price Action Review

The strategy of buying Campbell’s shares after quarterly revenue drops and selling after 30 days underperformed significantly, yielding -32.59% over three years versus a 22.76% benchmark. With a Sharpe ratio of -1.34 and no maximum drawdown, the approach highlights high risk and poor returns, underscoring the need for alternative investment strategies.

CEO Commentary

CEO Mick Beekhuizen acknowledged challenges, including 2% consumption declines and inventory buildups, but emphasized progress in cost savings and innovation. He highlighted premiumization trends, stable market share for 16 leadership brands, and strategic bets on Rao’s sauces and Goldfish multipacks.

Guidance

Campbell’s reiterated fiscal 2026 guidance, projecting 4% gross tariffs on cost of goods sold with 60% mitigation. Adjusted EBIT margin declines are expected amid inflation, though $375M in cost savings by 2028 will offset pressures.

Additional News

Campbell’s expanded its partnership with La Regina to enhance Rao’s product quality and innovation, a key growth driver. The company also announced a 49% stake acquisition in Rao’s Italy-based producer, signaling a larger bet on premium Italian sauces. Meanwhile, shares fell 4% post-earnings, nearing 2009 lows, amid concerns over margin pressures and sales declines. The stock has lost 31% year-to-date, contrasting with the S&P 500’s 16.4% gain.

Campbell’s Q1 results highlight resilience in a challenging environment, with strategic investments in premium products and cost mitigation. Investors remain cautious, however, as the stock’s underperformance reflects broader market skepticism.