The Campbell Company (NASDAQ: CPB) announced its third quarter fiscal 2025 results ended April 27, 2025, showcasing noteworthy financial performance amid a complex economic and supply chain landscape. This report reveals that net sales rose 4% year-over-year to $2.475 billion, driven primarily by the strategic acquisition of Sovos Brands in March 2024. Organic sales growth, excluding acquisition benefits, still produced a solid 1% increase, reflecting steady demand in a dynamic consumer staples market.
Key financial metrics from the quarter include Earnings Before Interest and Taxes (EBIT) reported at \(161 million, a decline of 35% from the prior year, primarily attributable to a significant non-cash impairment charge of \)150 million related to the Snyder’s of Hanover trademark within the Snacks segment. Adjusted EBIT, which excludes this impairment and other notable charges, improved by 2% to $362 million, benefiting from acquisition synergies and disciplined cost management.
Earnings Per Share (EPS) fell by 50% to \(0.22, reflecting the impairment and higher financing costs with net interest expense increasing from \)66 million to \(80 million due to higher debt levels and average interest rates. Adjusted EPS showed a milder 3% decline to \)0.73 per share. Fiscal year-to-date (nine months) cash flow from operations amounted to \(872 million, supporting \)403 million returned to shareholders through dividends and share repurchases, underscoring a commitment to shareholder value even in a challenging environment.
The quarter saw a mixed performance across business segments. Meals & Beverages net sales increased by 15%, largely powered by Sovos Brands acquisition impact and organic growth of 6%, driven by strong volume and product mix. Operating earnings in this segment grew 8% year-over-year. Conversely, the Snacks segment faced headwinds with sales declining 8% mainly due to organic volume decreases and divestitures, including the sale of the Pop Secret popcorn and Noosa yoghurt businesses. Snacks operating earnings declined 13% primarily from lower gross profit and impairment charges.
Cost pressures remain significant with gross profit margin contracting by 110 basis points to 30.1% adjusted, affected by inflation, unfavorable pricing, and supply chain costs, partially offset by productivity improvements and cost savings initiatives. The company has achieved \(110 million in savings to date from a targeted \)250 million cost savings program launched in September 2024.
Campbell reaffirmed its fiscal 2025 full-year guidance, projecting adjusted EPS at the lower end of the earlier provided range due to slower than expected recovery in the Snacks segment. This outlook excludes the estimated tariff-related cost headwind of \(0.03 to \)0.05 per share, which the company notes is fluid due to evolving legal and trade dynamics.
From a sector perspective, Campbell operates in the consumer staples industry, known for its defensive attributes with stable demand patterns. The company’s focus on brand strength, product innovation, and cost management is critical for maintaining competitiveness amid economic uncertainty and ongoing inflationary pressures.
Financially, Campbell’s leverage and interest expense increased with total debt rising to \(6.9 billion as of the quarter-end while cash and equivalents improved slightly to \)143 million. Strategic divestitures have reshaped the product portfolio toward higher growth and value-enhancing categories.
Looking forward, Campbell’s ongoing integration of Sovos Brands, execution of cost savings, and navigating tariff and supply chain issues remain key drivers for delivering sustainable growth and shareholder returns.
This insightful quarterly disclosure, combined with previous earnings call commentary emphasizing disciplined cost control, innovation-led growth, and strategic portfolio adjustments, positions Campbell well to adapt in a competitive consumer staples market.
For more details, the full 8-K report is available here: https://sec.gov/Archives/edgar/data/16732/000001673225000063/exhibit991-q32025.htm
Tags: CPB, CampbellCompany, Q3FY2025, ConsumerStaplesPerformance, TariffImpact, CostSavingInitiatives