The Campbell’s Company (NasdaqGS:CPB) Q1 2026 Earnings Call December 09, 2025 08:00 AM ET Speaker1Good morning and welcome to The Campbell's Company First Quarter Fiscal 2026 Earnings Conference Call. Today's conference is being recorded. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to turn the call over to Rebecca Gardy, Chie ...

Earnings Presentation Q1 Fiscal 2026 1 Rebecca Gardy Chief Investor Relations Officer Welcome Today's Agenda Mick Beekhuizen Chief Executive Officer Business Update Todd Cunfer Chief Financial Officer Financial Results and Outlook 2 Forward-looking Statements Safe Harbor Regarding Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations regarding our future results o ...

Core Viewpoint - Campbell Soup Company (CPB) is expected to report a decline in earnings for the quarter ending October 2025, with anticipated EPS of $0.73 and revenue of approximately $2.66 billion, reflecting a year-over-year decrease in both metrics [3]. Financial Performance - CPB has a history of exceeding earnings estimates, with an average earnings surprise of 10.54% over the past two quarters [2]. - In the most recent quarter, CPB reported an EPS of $0.62, surpassing the expected $0.57, resulting in an 8.77% surprise [2]. - The previous quarter showed a 12.31% surprise, with an EPS of $0.73 against a $0.65 estimate [2]. Earnings Estimates - Analysts predict an 18% decline in EPS compared to the same period last year, with the projected revenue indicating a 4.1% year-over-year decrease [3]. - The consensus EPS estimate has been revised downward by 0.5% over the past month, reflecting a reassessment of initial projections [4]. Financial Ratios - CPB's financial metrics include a price-to-earnings (P/E) ratio of 14.51 and a price-to-sales ratio of 0.85 [5]. - The enterprise value to sales ratio is 1.54, and the enterprise value to operating cash flow ratio is 13.84 [5]. - The company's debt-to-equity ratio stands at 1.85, with a current ratio of 0.77, indicating its ability to cover short-term liabilities [5].

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]

Financial Data and Key Metrics Changes - The third quarter earnings performance exceeded expectations, with reported net sales increasing by 4% driven by the Sovos acquisition and organic net sales growth of 1% [5][29] - Adjusted EBIT increased by 2% year-over-year, resulting in a slight margin decrease due to lower net pricing realization [9][30] - Adjusted EPS was down 3%, with a net positive contribution from the Sovos acquisition [10][30] Business Line Data and Key Metrics Changes - Meals and Beverages division reported organic net sales growth of 6%, driven by volume and mix growth of 7% [13][35] - Snacks business experienced a 5% decline in organic net sales, primarily due to lower volume and mix [20][36] - The overall consumption of Meals and Beverages leadership brands increased by 2%, while Snacks leadership brand consumption declined by 3% [11][13] Market Data and Key Metrics Changes - In-market consumption for Meals and Beverages outpaced category consumption, while Snacks lagged behind due to competitive pressures [7][10] - The consumer environment showed a preference for home-cooked meals, leading to increased demand for Meals and Beverages products [11][62] - The Snacks category faced a 3% decline in in-market consumption, attributed to deteriorating consumer confidence and increased competition [20][72] Company Strategy and Development Direction - The company is focused on near-term in-market execution and mitigating tariff impacts while investing in brand growth and capabilities [8][27] - A growth office has been established to enhance consumer insights, brand activation, and innovation [27] - The company aims to improve efficiency and effectiveness across the organization to facilitate long-term growth [27][41] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are making more deliberate spending decisions, impacting the Snacks business negatively [6][26] - The company expects adjusted earnings to be at the low end of the guidance range due to slower recovery in the Snacks business [7][39] - There is optimism regarding the sustainability of the at-home cooking trend, which has positively impacted the Meals and Beverages division [60][64] Other Important Information - The company has estimated the net incremental headwind of tariff-related costs to be up to $0.03 to $0.05 per share for fiscal 2025 [39][40] - Capital expenditures for fiscal 2025 are expected to be approximately 4.5% of net sales, reflecting a decrease from prior guidance [41] Q&A Session Summary Question: What is the pressure on the Snacks business? - Management indicated that about two-thirds of the pressure is due to overall category performance and one-third from in-market execution, with a focus on innovation and value [45][47] Question: What are the key factors for fiscal 2026? - Management noted that recovery in the Snacks business is expected to take place in fiscal 2026, with a need for increased marketing support [52][54] Question: How sustainable is the at-home cooking trend? - Management expressed optimism about the sustainability of the at-home cooking trend, supported by the company's diverse portfolio [60][64] Question: What is the impact of tariffs on future guidance? - Management clarified that the estimated tariff impact is being phased in and should not be annualized at this time due to the evolving trade landscape [75][80] Question: What is the growth expectation for Rao's? - Management expects high single-digit growth for Rao's in fiscal 2025, with confidence in the brand's trajectory [83][84]