Core Insights - The company has undergone leadership changes, with Mick Beekhuizen transitioning from CFO to CEO over the past six months, bringing a wealth of experience from various roles within the organization [2][3] - The company is focused on navigating an evolving market environment to achieve sustainable profitable growth, leveraging its strong portfolio of brands [3] Leadership Transition - Mick Beekhuizen has been with the company for six years, holding key positions that have provided him with a deep understanding of the organization [2] - The transition to CEO has not revealed any major surprises, indicating a strong familiarity with the company's operations and challenges [2] Market Environment - The current market environment is described as continuously evolving, which presents both challenges and opportunities for the company [2] - The emphasis is on adapting strategies to ensure the company can return to a path of sustainable profitable growth [3]

Financial Data and Key Metrics Changes - The company reported organic growth expectations for fiscal 2026 in the range of -1% to +1%, indicating flat organic growth at the midpoint [10] - The midpoint of the EPS guidance for fiscal 2026 is approximately $0.40 lower year-over-year, with about two-thirds of this decrease attributed to tariff headwinds [12][13] - The company increased its cost savings program from $250 million to $375 million, with $145 million delivered in fiscal 2025 [66][67] Business Line Data and Key Metrics Changes - Meals and Beverages are expected to maintain momentum due to at-home cooking trends, while Snacks are anticipated to stabilize in the second half of fiscal 2026 [11][43] - The company noted that Rao's brand has high single-digit growth and significant distribution opportunities [39] - Milano Cookies experienced a 27% growth in the past quarter, showcasing the impact of innovation on brand performance [55] Market Data and Key Metrics Changes - The company is facing a dynamic operating environment with challenges such as tariffs impacting costs, particularly in the Meals and Beverages segment [8][63] - The overall cookie category is down, yet the company has managed to grow its cookie portfolio through successful product launches [55] Company Strategy and Development Direction - The company aims to return to sustainable profitable growth by focusing on its strong brand portfolio and investing in innovation [4][72] - There is a commitment to maintaining competitive pricing while providing value to consumers, especially in the soup segment [28][63] - The company is leveraging its scale and focusing on North American markets to drive growth [72] Management's Comments on Operating Environment and Future Outlook - The CEO emphasized the importance of adapting to consumer trends such as premiumization and health and wellness [6][72] - Management acknowledged the challenges posed by tariffs but expressed confidence in mitigating some of these impacts through productivity initiatives [8][63] - The company is focused on evolving its portfolio to align with changing consumer preferences [6][72] Other Important Information - The company plans to phase its marketing spend to reach a midpoint of 9.5% of net sales in fiscal 2026 [60] - The integration of Sovos is expected to continue providing savings as part of the cost savings program [67] Q&A Session Summary Question: What are the key takeaways from the fiscal fourth quarter earnings? - The CEO highlighted the evolving consumer landscape and the need for the company to adapt its strategies accordingly [6] Question: What is the outlook for organic growth in fiscal 2026? - The CFO provided a range of -1% to +1% for organic growth, with expectations for stabilization in Snacks [10][43] Question: How is the company addressing pricing challenges due to tariffs? - Management discussed surgical pricing strategies to mitigate tariff impacts while maintaining consumer value [28][63] Question: What are the growth opportunities for the Rao's brand? - The CEO noted high single-digit growth and significant potential for distribution expansion [39] Question: How does the company plan to achieve its cost savings targets? - The CFO outlined the increased cost savings program and the sources of savings, including integration and network optimization [66][67]

Financial Data and Key Metrics Changes - The company reported an organic growth expectation for fiscal 2026 ranging from -1% to +1%, indicating flat organic growth at the midpoint [10] - The EPS guidance for fiscal 2026 is expected to decrease by approximately $0.40 year-over-year, primarily due to tariff headwinds [12][13] - The company increased its cost savings target from $250 million to $375 million, reflecting confidence in achieving further savings [61] Business Line Data and Key Metrics Changes - Meals and Beverages are expected to maintain momentum due to ongoing at-home cooking trends, while Snacks are anticipated to stabilize in the second half of fiscal 2026 [10][40] - The company noted that Rao's brand has high single-digit growth and strong household penetration, indicating a positive outlook for this segment [36] Market Data and Key Metrics Changes - The company is facing a dynamic operating environment with challenges such as tariffs impacting costs, particularly in the Meals and Beverages division [7][58] - The overall cookie category is down, yet the Milano Cookies brand experienced a 27% growth, showcasing the effectiveness of innovation [49] Company Strategy and Development Direction - The company aims to return to sustainable profitable growth by focusing on its strong brand portfolio and investing in innovation [4][68] - A growth office has been established to enhance capabilities and drive consistent growth across the organization [68] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of adapting to evolving consumer trends, such as premiumization and health and wellness [6] - The CEO expressed confidence in the company's ability to navigate challenges and achieve growth, despite a dynamic operating environment [67][68] Other Important Information - The company is focusing on surgical pricing strategies to mitigate the impact of tariffs and inflation on costs [58][60] - Marketing spend is targeted to be in the 9% to 10% range of net sales, with expectations to gradually phase into this level [55] Q&A Session Summary Question: What are the key drivers of organic sales performance in the Meals and Beverages segment for fiscal 2026? - The company highlighted the positive trend of cooking at home and the value offered by its meal solutions as key drivers [20] Question: How does the company balance pricing actions with consumer sensitivity in the soup category? - Management stated that value is not solely defined by price and emphasized a surgical approach to pricing while monitoring consumer response [21][24] Question: What is the outlook for the Rails brand and its growth potential? - The company is optimistic about the Rails brand, expecting continued high single-digit growth and exploring distribution opportunities [36][38] Question: What is the plan for stabilizing the Snacks business? - Management anticipates gradual improvement in the Snacks segment, with stabilization expected in the second half of fiscal 2026 [40][41] Question: How does the company view its long-term growth strategy? - The CEO reaffirmed the commitment to sustainable growth and the importance of leveraging the company's scale and brand portfolio [68]

Core Viewpoint - The Campbell's Company's fiscal Q4 2025 results indicate a company under pressure, yet possessing hidden strengths that the market has positively reacted to [1]. Group 1: Company Performance - The fiscal Q4 2025 results reflect challenges faced by the company, suggesting a need for strategic adjustments to navigate current market pressures [1]. Group 2: Market Reaction - The market's positive reaction to the company's results indicates potential investor confidence in the company's underlying strengths despite the reported pressures [1].

Core Insights - The Campbell's Company (CPB) reported mixed results for the fourth quarter of fiscal 2025, with earnings exceeding estimates while net sales fell short [1][3] - Year-over-year earnings declined, but net sales increased, primarily due to the acquisition of Sovos Brands [1][3] Financial Performance - Adjusted earnings per share (EPS) were 62 cents, a 2% decrease year over year, but above the Zacks Consensus Estimate of 57 cents [2][9] - Net sales reached $2,321 million, a 1% increase year over year, but below the Zacks Consensus Estimate of $2,334 million [3][9] - Organic net sales fell 3% to $2.2 billion, attributed to lower volume/mix and the reversal of favorable shipment timing [3] Profitability Metrics - Adjusted gross profit decreased to $709 million from $719 million, with the gross profit margin declining by 90 basis points to 30.5% [4][9] - The margin decline was driven by cost inflation and supply-chain expenses, partially offset by productivity benefits and favorable net price realization [4] Expense Analysis - Adjusted marketing and selling expenses rose 5% to $197 million, mainly due to increased advertising and consumer promotion costs [5] - Adjusted administrative expenses fell 4% to $158 million, reflecting cost savings and lower incentive compensation [5] Segment Performance - Meals & Beverages segment net sales were $1,202 million, unchanged from the previous year, with organic sales down 3% due to declines in Rao's pasta sauces and U.S. soup [6] - Snacks segment net sales totaled $1,012 million, a 2% increase year over year, but organic sales decreased by 2% [7] Cash Flow and Capital Management - As of the end of the quarter, Campbell's had cash and cash equivalents of $132 million and total debt of $6,857 million [8] - The company paid $459 million in cash dividends and repurchased nearly $62 million in shares during the period [8] Fiscal 2026 Guidance - For fiscal 2026, CPB anticipates net sales to be flat to down 2%, with organic net sales expected to range from a 1% decline to a 1% increase [13] - Adjusted EBIT is projected to decrease by 9-13%, and adjusted EPS is expected to decline by 12-18%, ranging from $2.40 to $2.55 [13] Strategic Outlook - The company aims to leverage consumer trends towards premiumization and health, while facing challenges from input cost inflation and tariffs [11][12]

Financial Data and Key Metrics Changes - In the fourth quarter, reported net sales increased by 1%, while organic net sales declined by 3% due to unfavorable shipment timing and divestitures [9][27] - Adjusted EBIT decreased by 2%, and adjusted EPS was down by 2% to $0.62, reflecting the impact of tariffs and divestitures [29][32] - For the full year, net sales grew by 6%, primarily driven by the Sovos Brands acquisition, while adjusted EBIT increased by 2% [9][29] Business Line Data and Key Metrics Changes - Meals and Beverages organic net sales decreased by 3% in Q4, with volume and mix down by 4%, while dollar consumption grew by 1% [15][32] - Snacks reported a 2% increase in net sales, but organic net sales decreased by 2%, driven by lower volume and mix [33][34] - The consumption of leadership brands in Meals and Beverages increased by 1% in Q4, while Snacks leadership brand consumption declined by 2% [13][15] Market Data and Key Metrics Changes - In-market consumption for the overall category declined by 1%, with consumers remaining cautious in their spending [7][8] - The broth category saw a 7% consumption growth, driven by increased usage among millennials and boomers [16] - The Italian sauce category grew by 2% year-over-year, with Campbell's Italian sauce portfolio outpacing this at 4% growth [17] Company Strategy and Development Direction - The company plans to increase marketing investments and focus on innovation to support brand growth, particularly in the Meals and Beverages segment [8][25] - A new growth office has been established to align innovation with consumer needs, emphasizing health and elevated taste experiences [11][25] - The company is committed to mitigating tariff impacts through cost savings initiatives and strategic pricing actions [25][37] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are increasingly seeking value through at-home cooking, which supports growth in the Meals and Beverages segment [7][8] - The company anticipates a challenging operating environment in fiscal 2026, with expected declines in adjusted EBIT and EPS due to tariffs and divestitures [40][41] - Management expressed confidence in the ability to navigate challenges while capturing growth opportunities through strategic investments [42] Other Important Information - The company plans to discontinue the use of FD&C colors in its products by the second half of fiscal 2026 [12] - The Sovos Brands acquisition has been accretive to adjusted EPS and has performed well since its integration [29][30] - The company generated $1.13 billion in operating cash flow for fiscal 2025, with capital expenditures at $426 million [35][36] Q&A Session Summary Question: Can you provide more detail on the outlook for fiscal 2026? - Management highlighted the importance of brand support and innovation, with expectations for stabilization in the snacking business in the second half of the year [45][46] Question: What are the expectations for the snacks category stabilization? - Management noted that snacking occasions are stable, and the company is focused on premiumization and flavor exploration to connect with consumers [56][58] Question: How does the company plan to address tariff impacts? - Management discussed a combination of inventory management, supplier collaboration, and surgical pricing initiatives to mitigate tariff impacts [65][72]

Financial Data and Key Metrics Changes - In-market consumption during Q4 declined by 1%, while organic net sales decreased by 3%, primarily due to favorable shipment timing in Q3 reversing in Q4 [7][26] - Reported net sales increased by 1%, adjusted EBIT and adjusted EPS both decreased by 2% compared to the prior year [8][26] - For the full year, net sales grew by 6%, driven mainly by the Sovos Brands acquisition, while adjusted EBIT increased by 2% [8][29] Business Line Data and Key Metrics Changes - Meals and Beverages organic net sales decreased by 3% in Q4, with volume and mix down by 4% [13][31] - Snacks reported a 2% increase in net sales, but organic net sales decreased by 2%, driven by lower volume and mix [32][33] - The consumption of Meals and Beverages leadership brands increased by 1% in Q4, while Snacks leadership brand consumption declined by 2% [12][13] Market Data and Key Metrics Changes - The overall consumer environment remained cautious, with at-home cooking trends benefiting the Meals and Beverages segment [5][12] - The broth category saw a 7% consumption growth, while the soup portfolio's dollar share declined by 0.8 points due to the discontinuation of the Well Yes brand [15][17] - The Italian sauce category grew by 2% year-over-year, with Campbell's Italian sauce portfolio outpacing this at 4% growth [16] Company Strategy and Development Direction - The company plans to increase marketing investments and focus on innovation to support its brand portfolio [6][24] - A new growth office has been established to align innovation with consumer needs, emphasizing health and elevated taste experiences [10][24] - The company is committed to mitigating tariff impacts through various strategies, including cost savings initiatives and pricing actions [35][39] Management Comments on Operating Environment and Future Outlook - Management noted that consumers are increasingly seeking value, flavor-forward offerings, and health benefits, which are driving innovation [5][10] - The company expects a more significant impact from tariffs in fiscal 2026, projecting gross tariffs at approximately 4% of cost of products sold [34][38] - Despite challenges, management is optimistic about sustainable growth in fiscal 2026, focusing on productivity and cost savings [39][40] Other Important Information - The company plans to remove FD&C colors from its food and beverage products by the second half of fiscal 2026 [11] - The Sovos Brands acquisition performed well, contributing positively to net sales growth and integration synergies [29] Q&A Session Summary Question: Insights on fiscal 2026 outlook and factors affecting guidance - Management discussed the importance of brand support and innovation in navigating the dynamic operating environment, with a focus on productivity and cost savings [44][46] Question: Stabilization in the snacks category - Management highlighted that snacking occasions are stable, with a focus on premiumization and flavor exploration to connect with consumers [56][58] Question: Impact of tariffs on pricing strategy - Management indicated a surgical approach to pricing, balancing the need to offset tariffs while maintaining product quality [64][66] Question: Sustainability of tariff mitigation strategies - Management explained that inventory management and supplier collaboration are key levers, with alternative sourcing being explored where feasible [70][72]

Financial Data and Key Metrics Changes - The fourth quarter reported net sales increased by 1%, while organic net sales decreased by 3% due to shipment timing and divestitures [10][32][33] - Adjusted EBIT decreased by 2%, and adjusted EPS was down 2% to $0.62, reflecting tariff impacts and divestitures [11][33][40] - For the full year, net sales grew by 6%, primarily driven by the Sovos acquisition, while adjusted EBIT increased by 2% [11][33] Business Line Data and Key Metrics Changes - Meals and Beverages organic net sales decreased by 3% in Q4, with a 4% decline in volume and mix, but dollar consumption grew by 1% [17][38] - Snacks reported a 2% decline in organic net sales, driven by lower volume and mix, although sequential improvements were noted in some brands [23][40] - The overall consumption in Meals and Beverages increased by 1% in Q4, while Snacks consumption declined by 2% [15][16] Market Data and Key Metrics Changes - In market consumption for the fourth quarter declined by 1%, with organic net sales down 3% [10][11] - The Meals and Beverages leadership brands gained 0.2 share points, while Snacks experienced share losses in some categories [15][16] - The overall consumer environment remained cautious, with a trend towards at-home cooking benefiting the Meals and Beverages segment [8][15] Company Strategy and Development Direction - The company plans to increase marketing support and new product innovation across leadership brands, focusing on the at-home cooking trend [29][30] - A growth office has been established to enhance consumer insights, integrated marketing, and innovation [30] - The company is intensifying its cost savings initiatives, increasing the target to $375 million by the end of fiscal 2028 [45][49] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are increasingly cautious and intentional with their spending, seeking value through at-home cooking and premium offerings [8][15] - The company expects a more significant impact from tariffs in fiscal 2026, projecting gross tariffs at approximately 4% of cost of products sold [43][48] - Despite challenges, management is confident in the company's ability to navigate the environment and deliver sustainable growth [30][49] Other Important Information - The company will change how it reports market share for certain brands starting in fiscal 2026 to better reflect performance [4][5] - The total combined dollar spend on adjusted marketing, selling, and administrative expenses remained flat at approximately 15% of net sales [36] Q&A Session Summary Question: Insights on fiscal 2026 outlook - Management discussed factors influencing the guidance range, emphasizing the importance of brand support and innovation while addressing productivity and cost savings [53][55][56] Question: Stabilization in Snacks category - Management highlighted the evolving snacking behaviors and the need for increased brand support and innovation to achieve stabilization [68][70][74] Question: Tariff impact and pricing strategies - Management explained the surgical pricing initiatives being implemented to offset tariff impacts, particularly in the soup category [80][83] Question: Sustainability of inventory management strategies - Management indicated that inventory management and supplier collaboration are key levers for mitigating costs, with ongoing efforts to find offsets [87][89] Question: Increased productivity savings target - Management expressed confidence in achieving the increased savings target without compromising capabilities, citing successful integration and optimization efforts [97][98]

Financial Performance - Q4 Fiscal Year 2025 - Net sales increased by 1% to $2321 million compared to Q4 FY24[19, 68] - Organic net sales decreased by 3% compared to Q4 FY24[19, 68] - Adjusted EBIT decreased by 2% compared to Q4 FY24, reaching $321 million[19, 68] - Adjusted EPS decreased by 2% compared to Q4 FY24, amounting to $062[19, 68] Financial Performance - Full Fiscal Year 2025 - Net sales increased by 6% to $10253 million compared to FY24[19, 71] - Organic net sales decreased by 1% compared to FY24[19, 71] - Adjusted EBIT increased by 2% compared to FY24, reaching $1487 million[19, 71] - Adjusted EPS decreased by 4% compared to FY24, amounting to $297[19, 71] Segment Performance - Meals & Beverages organic net sales decreased by 3% in Q4 FY25[35] - Snacks organic net sales decreased by 2% in Q4 FY25[51] Fiscal Year 2026 Guidance - The company expects net sales to decline by 2% to 0%[109] - Organic net sales are projected to range from -1% to +1%[109] - Adjusted EBIT is expected to decline by 13% to 9%[109] - Adjusted EPS is projected to be in the range of $240 to $255[109]

CAMPBELL'S REPORTS FOURTH QUARTER FISCAL 2025 RESULTS; PROVIDES FULL-YEAR FISCAL 2026 GUIDANCE • Net Sales increased 6% to $10.3 billion and decreased 1% on an organic basis. • EBIT increased to $1.1 billion. Adjusted EBIT increased 2% to $1.5 billion including the impact of the Sovos Brands acquisition. • EPS increased to $2.01. Adjusted EPS decreased 4% to $2.97. • Cash flow from operations was $1.1 billion; returned $521 million to shareholders including $459 million in dividends. Beekhuizen continued, " ...