The Campbell’s Company has lowered its full-year sales and profit outlook, blaming underperformance in snacks and bad weather.
Organic sales in snacks posted a more protracted decline than the overall group business in the second quarter, Campbell’s reported today (11 March), as the listed food business ruled out any growth for fiscal 2026.
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The guidance provided in December for organic sales in the range of a 1% decline to 1% growth was reduced to a 2% to 1% decline.
Group organic sales fell 3% in the three months to 1 February and were down 5% on a reported basis at $2.56bn. Snack sales dropped 6% in organic terms to $914m, while meals and beverages decreased 2% to $1.65bn.
Storms that hit the US in January delayed shipments and along with supply chain costs shaved 1% off second-quarter net sales, Campbell’s said, as net income slid 16% and lost 13% for the year so far.
Adjusted EBIT was down 24% and while adjusted EPS decreased 31% to $0.51.
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By GlobalDataConsequently, the Cape Cod and Kettle crisps maker now expects a decline in adjusted EBIT for the year of 17% to 20%, compared to the December forecast of minus 9% to 13%.
Adjusted EPS is slated for a 23% to 26% decrease to $2.15 to $2.25. The prior estimate was for a 12% to 18% drop, or $2.40 to $2.55.
CEO Mick Beekhuizen said the results “fell short of our expectations”.
He added: “To stabilise snacks, we are taking decisive action, focused on sharpening our value, new product innovation and in-market execution”.
“We are also accelerating cost-saving initiatives to mitigate cost headwinds and support continued investment in our brands. Given our first-half results and the current operating environment, we are lowering our full-year outlook to reflect a more cautious view for the balance of the year.”
He offered some reassurance that “brand portfolio fundamentals remain sound, and we continue to be confident in our ability to create sustainable profitable growth over the long term”.
However, volume/mix fell across both categories resulting in a group decline of 4%. Snacks volume/mix dropped 6% based on flat price realisation, while meals and beverages decreased 2% with a positive 1% price contribution.
For snacks, Campbell’s said the sales decline was driven by crisps and pretzels, along with “supply constraints related to fresh bakery and third-party partner brands and contract manufacturing”.
Meals and beverages delivered a better organic sales performance when the disposal of the Noosa yogurt business was discounted but were still down 2% led by soup in the US, Prego pasta sauces, foodservice and V8 beverages.
Sales of Rao’s sauces offset some of that impact.
Campbell’s said sales in US soup decreased 4% with “pressure concentrated in condensed soups, ready-to-serve soups and broth”.
Noosa was let go two years ago in a deal struck with US desserts and dips maker Lakeview Farms.
Meanwhile, net income dropped 16% in the quarter to $145m and fell 13% over the six months to $339m.
Year-to-date net sales declined 4% to $5.24bn and adjusted EBIT retreated 12% to $609m.
