Campbell's Company (CPB) Q3 2026: Revenue Decline, Mixed Earnings — Cautiously Disappointed

In the third quarter of fiscal 2026, Campbell's Company reported a net sales decrease of $109 million or -4% year-over-year, totaling $2.366 billion compared to $2.475 billion in the same quarter last year. This decline reflects ongoing challenges in the market, including inflationary pressures and a decrease in volume/mix.

Despite the revenue drop, the company did see an increase in earnings before interest and taxes (EBIT) to $239 million, which is an increase of 48% from $161 million in the prior year. However, adjusted EBIT fell by 24% to $274 million. The diluted earnings per share (EPS) rose to $0.41, an 86% increase from $0.22 in the previous year, but adjusted EPS decreased by 32% to $0.50.

Analyst View

This quarter presents a mixed bag for shareholders. While the increase in reported EBIT and EPS might seem positive, the underlying adjusted figures reveal significant operational challenges. The 4% decline in net sales and the 32% drop in adjusted EPS indicate that the company is struggling to maintain its revenue growth amidst inflation and competitive pressures. The reaffirmation of full-year fiscal 2026 guidance suggests that management is confident in their strategy, but the current results may lead to cautious sentiment among investors.

Key Metrics

• Net Sales: $2.366 billion (down $109 million or -4% YoY)
• EBIT: $239 million (up $78 million or +48% YoY)
• Adjusted EBIT: $274 million (down $87 million or -24% YoY)
• Diluted EPS: $0.41 (up $0.19 or +86% YoY)
• Adjusted EPS: $0.50 (down $0.24 or -32% YoY)
• Cash Flow from Operations (YTD): $839 million (down from $872 million YoY)

Shareholder Returns and Guidance

The company has paid $380 million in dividends year-to-date, reflecting its commitment to returning value to shareholders. Importantly, Campbell's has reaffirmed its full-year fiscal 2026 guidance, which includes expectations for organic net sales to decline by 2% to 1%, adjusted EBIT to decrease by 20% to 17%, and adjusted EPS to fall by 26% to 23%, targeting a range of $2.15 to $2.25.

Forward Catalysts

Investors should closely monitor Campbell's efforts to navigate inflationary pressures and improve operational efficiency in the upcoming quarters. The company's focus on cost savings, with $20 million achieved in the third quarter and a total of $200 million towards a target of $375 million by fiscal 2028, will be crucial. Additionally, any updates on product innovation and marketing strategies, particularly in the Meals & Beverages and Snacks segments, will be key indicators of the company's ability to regain momentum.

In summary, while Campbell's Company has shown resilience in certain areas, the overall performance this quarter raises concerns about its ability to sustain growth in a challenging economic environment. Investors should remain vigilant as the company implements its strategies to address these challenges.

Note: All amounts are in millions.

($ in millions, except per share amounts)	Three Months Ended	May 3, 2026	April 27, 2025
Net sales	$2,366	$2,475
Costs and expenses	$2,127	$2,314
Earnings before interest and taxes	$239	$161
Interest, net	$80	$80
Earnings before taxes	$159	$81
Taxes on earnings	$35	$15
Net earnings	$124	$66

Note: All amounts are in millions.

($ in millions)	May 3, 2026	April 27, 2025
Current assets	$2,559	$2,226
Plant assets, net of depreciation	$2,735	$2,665
Goodwill	$4,993	$4,991
Other intangible assets, net of amortization	$4,325	$4,366
Other assets	$530	$580
Total assets	$15,142	$14,828

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