Latest news with #Campbells
Yahoo
a day ago
- Business
- Yahoo
Tariff uncertainty is hammering one of America's favorite food escapes — snacks
Tariff uncertainty and inflation are driving consumer decisions at the grocery stores, and for big packaged food companies, one key area is bearing the brunt of these changes: snacking. In its quarterly report released Monday, Campbell's (CPB), which owns snack brands like Goldfish crackers and Cape Cod chips, said that it saw "increased headwinds" in snacking, leading to a 5% decline in volume mix and an 8% decrease in revenue in its fiscal third quarter results. Consumers "are increasingly intentional about the discretionary snack purchases," CEO Mick Beekhuizen told investors on the company's earnings call, a trend that has only gotten worse as the year's gone on. "If you look at the quarter, Q3, and you put it in perspective versus Q2, you see... the aggregate categories deteriorated... driven by the deteriorating consumer confidence," Beekhuizen added. Campbell's is only the latest in a series of packaged food giants to call out a shift in snacking behavior. "Revenue management clearly is becoming more complex," PepsiCo (PEP) CEO Ramon Laguarta told investors on the company's earnings call in late April, "as consumers are feeling more challenged with their disposable income." Laguarta said consumers' approach to shopping changed in the quarter. In early April, consumers were looking to see how much they got per item, and by the end of the month, they were more focused on the "absolute price per unit." Pepsi's snack portfolio includes Frito-Lay brands like Lays, Cheetos, Doritos, and Tostitos, among others. Kraft Heinz's (KHC) portfolio overall — ranging from Jell-O to Lunchables — saw its volume mix drop 5.6 percentage points in the quarter. Kellanova (K), which is behind brands like Cheez-Its and Pringles, saw its volume decline in North America. The company is in the process of being acquired by Mars. The summer months could potentially catalyze a turnaround in consumer habits, with holidays offering what Kraft Heinz CEO Carlos Abrams-River called "volume opportunities" on the company's latest earnings call in late April. Winning holidays is crucial. "Holidays matter... It's like holidays are almost worth double relative to a regular week," Bank of America analyst Peter Galbo told Yahoo Finance. Better weather also plays a key role. For example, if Memorial Day weather isn't very good in much of the country, it can create a "meaningful swing factor" for snacks. If "the weather is bad," Galbo added, "You're not going to have a barbecue, so you don't buy Tostitos or Lays." This snacking slowdown also comes as consumer confidence has fallen sharply, rising in May for the first time all year. At the same time, the US labor market is beginning to show some cracks, with the number of Americans collecting unemployment checks in mid-May standing at the highest in 3.5 years. Uncertainty surrounding tariffs has also weighed on pricing and the consumer outlook. Data from PwC found prices for shelf-stable categories like sauces, pasta, canned beans, and snacks are up 1%-6% over the last week due to the impact of tariffs. Read more: What Trump's tariffs mean for the economy and your wallet From a product packaging and ingredient standpoint, Galbo said he doesn't expect tariffs to impact snacks, which are mostly sourced domestically or from Canada, which is likely exempt as a result of the USMCA. Inflation data out last month showed grocery prices fell 0.4% in April while overall food inflation fell 0.1%, the sharpest drop in both measures since 2020. Still, measures like this year's spike — and then sharp decline — in egg prices show consumers navigating a volatile food pricing environment and acting with caution as they roam the aisles. "Snacking is way more discretionary than we probably all thought it was, as opposed to being a staple," Galbo said. "Which is what these companies were supposed to be." Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Daily Mail
2 days ago
- Business
- Daily Mail
Campbell's posts bumper sales amid economic uncertainty
Shoppers are buying more soup. That might be a bad sign for the economy. Campbell's — the company behind its namesake soups, as well as brands like Pepperidge Farm and V8 juices — just posted a profit of $66 million. The food maker's CEO, Mick Beekhuizen, said customers have been snapping up low-cost meal soups from grocery stores. The company reported 15 percent sales growth in its meals and beverages division. 'Consumers are cooking at home at the highest levels since early 2020,' he said while reporting the company's earnings. Still, Campbell's noted that customers have been pulling back on snack purchases as shoppers cut discretionary spending. It saw an 8 percent sales decline for its snack brands. Executives reiterated their full-year forecast, saying they expect sales to grow by around 6 percent by the end of 2025. That's down from the company's previous projection of 9 to 11 percent growth. The company's meal growth and snack decline reflect how many Americans are responding to slumping consumer sentiment reports and higher costs in grocery stores. American shoppers are worried about inflation . Monthly inflation rates have cooled to just above the Federal Reserve's target of 2 percent, after peaking at over 9 percent in 2022. But elevated food prices haven't come down: many of those increases are now baked into the cost of everyday goods. Now, shoppers are contending with President Donald Trump's tariffs, which threaten to push food prices even higher. Dozens of food providers — including mid-tier restaurant chains, grocery stores, and budget brands — say their customers are spending less and opting for cheaper options. Casual dining restaurants have been hit particularly hard. These establishments, which rely on discretionary spending from middle-income Americans, are reporting slower traffic and reduced spending. At the same time, they're facing rising costs for the ingredients they use. Bloomin' Brands, the owner of Outback Steakhouse, posted an 8.3 percent sales decline in April. McDonald's also posted a 3.6 percent sales decline . The toxic mix of slowing sales and higher costs has spelled doom for hundreds of restaurant locations and some of America's most recognizable brands. In the past year and change, several iconic brands have filed for bankruptcy, including TGI Fridays, Red Lobster, Hooters, Bertucci's, and On The Border. The wave of closures highlights a broader reality: more Americans are trading nights out for meals at home — and not by choice. That belt-tightening is being echoed by low-cost retailers like Dollar General, which cater to budget-conscious consumers. Executives there are also seeing signs that financial stress is reshaping how people shop.
Yahoo
2 days ago
- Business
- Yahoo
The Campbell's Co (CPB) Q3 2025 Earnings Call Highlights: Strong Meals & Beverages ...
Organic Net Sales Growth: 1% driven by volume growth. Net Sales Growth: 4% reflecting organic growth and contribution from Rao's. Adjusted EBIT: Increased 2% versus prior year. Adjusted EPS: Down 3% to $0.73. Meals & Beverages Organic Net Sales: Increased 6% for the quarter. Snacks Organic Net Sales: Declined 5% driven by lower volume and mix. Operating Cash Flow Year-to-Date: $872 million. Capital Expenditures Year-to-Date: $296 million. Net Debt-to-Adjusted EBITDA Leverage Ratio: 3.6 times. Cost Savings Program: $110 million of total savings delivered. Warning! GuruFocus has detected 5 Warning Signs with CPB. Release Date: June 02, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. The Campbell's Co (NASDAQ:CPB) exceeded third-quarter earnings expectations, driven by strong performance in the Meals & Beverages division. Organic net sales growth of 1% was achieved, marking five consecutive quarters of flat or positive volume across the enterprise. The company's soup portfolio continued strong performance, with Campbell's total wet soup growing dollar-share by 0.4 points. The Meals & Beverages division saw a 6% increase in organic net sales, led by volume and mix growth. The integration of Sovos Brands into Campbell's ERP system is expected to unlock additional back-office savings. The Snacks business faced mixed performance due to continued category softness and an increasingly competitive environment. Adjusted EPS was down 3% compared to the prior year, impacted by higher adjusted interest expense. The company expects adjusted earnings to be at the low end of the guidance range due to slower-than-anticipated recovery in the Snacks business. Snacks organic net sales decreased by 5%, driven by lower volume and mix. The company faces potential headwinds from tariffs, estimated to impact fiscal '25 adjusted EPS by up to 3 to 5 cents per share. Q: How much of the pressure in the Snacks segment is due to overall category trends versus Campbell's in-market execution, and what steps is the company taking to address these issues? A: Mick Beekhuizen, CEO, explained that about two-thirds of the pressure is due to worsening aggregate categories, while one-third is due to in-market performance. The company is focusing on innovation, distribution expansion, and price pack architecture to address these challenges. They are also working on reigniting core brands like Goldfish with advertising and strategic promotional activities. Q: What are the key factors to consider for fiscal '26, especially regarding the need for reinvestment in the Snacks segment? A: Mick Beekhuizen, CEO, noted that the recovery of the Snacks business is now expected in fiscal '26. The company plans to invest more in marketing and brand support, potentially increasing spending from the current 9% to 10% range. Additionally, incentive compensation may pose a headwind next year. Q: How sustainable is the trend of increased at-home cooking and eating, and what factors are driving this trend? A: Mick Beekhuizen, CEO, expressed optimism about the sustainability of this trend, driven by consumer focus on value, quality, and convenience. The Meals & Beverages portfolio is well-positioned to capitalize on this trend, with both mainstream and premium offerings. However, he cautioned that Q3 results might not be repeated as the company exits the soup season. Q: Is there an expectation for increased promotional activities in light of competitive pressures in categories like RTS, premium pasta sauce, or snacks? A: Mick Beekhuizen, CEO, indicated that the focus is not on increasing promotional activities but rather on ensuring that existing promotions are strategically timed and effective. The company is also working on price pack architecture to ensure competitive starting price points in the market. Q: What needs to happen from a category perspective in Snacks to see improvements, and how does consumer perception of "worth it" play into this? A: Mick Beekhuizen, CEO, highlighted that improving consumer confidence would benefit the Snacks category. The focus is on meeting consumer needs for value, better-for-you options, and indulgence. Innovation, such as the Milano White Chocolate launch, is key to driving growth by enhancing consumer experiences. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Associated Press
3 days ago
- Business
- Associated Press
Campbell's Co. says sales rise as more Americans cook meals at home
The Campbell's Co. said Monday it saw stronger sales of broth and condensed soup in its latest quarter as more Americans cooked their meals at home. 'Consumers continue to cook at home and focus their spending on products that help them stretch their food budgets, and they're increasingly intentional about their discretionary snack purchases,' Campbell's President and CEO Mick Beekhuizen said during a conference call with investors. Beekhuizen said Campbell's saw the highest level of meals cooked at home since early 2020 in its fiscal third quarter, which ended April 27. Campbell's noted sales of its broths rose 15% during the quarter while sales of its Rao's pasta sauces were up 2%. But Campbell's said sales of its snacks, including Goldfish crackers and Cape Cod potato chips, fell 4% during the quarter. Other big companies, including McDonald's, have also noted that Americans are increasingly eating at home as uncertainty over the economy grows. Grocery prices have also moderated. In 2024, prices for food eaten at home rose 1.2%, while prices for food away from home rose 4.1%, according to the U.S. Department of Agriculture. Snack makers like PepsiCo, which makes Frito Lay chips, and General Mills, which makes Bugles chips and Golden Grahams, have also noted lower demand for snacks in recent quarters. Campbell's net sales rose 4% to $2.5 billion for the fiscal third quarter, which was in line with Wall Street's expectations, according to analysts polled by FactSet.
Daily Mail
3 days ago
- Business
- Daily Mail
Campbell's posts bumper sales... but it's bad news for America's chain restaurants
Shoppers are buying more soup. That might be a bad sign for the economy. Campbell's — the company behind its namesake soups, as well as brands like Pepperidge Farm and V8 juices — just posted a profit of $66 million. The food maker's CEO, Mick Beekhuizen, said customers have been snapping up low-cost meal soups from grocery stores. The company reported 15 percent sales growth in its meals and beverages division. 'Consumers are cooking at home at the highest levels since early 2020,' he said while reporting the company's earnings. Still, Campbell's noted that customers have been pulling back on snack purchases as shoppers cut discretionary spending. It saw an 8 percent sales decline for its snack brands. Executives reiterated their full-year forecast, saying they expect sales to grow by around 6 percent by the end of 2025. That's down from the company's previous projection of 9 to 11 percent growth. The company's meal growth and snack decline reflect how many Americans are responding to slumping consumer sentiment reports and higher costs in grocery stores. American shoppers are worried about inflation. Monthly inflation rates have cooled to just above the Federal Reserve's target of 2 percent, after peaking at over 9 percent in 2022. But elevated food prices haven't come down: many of those increases are now baked into the cost of everyday goods. Now, shoppers are contending with President Donald Trump's tariffs, which threaten to push food prices even higher. Dozens of food providers — including mid-tier restaurant chains, grocery stores, and budget brands — say their customers are spending less and opting for cheaper options. Casual dining restaurants have been hit particularly hard. These establishments, which rely on discretionary spending from middle-income Americans, are reporting slower traffic and reduced spending. At the same time, they're facing rising costs for the ingredients they use. Bloomin' Brands, the owner of Outback Steakhouse, posted an 8.3 percent sales decline in April. McDonald's also posted a 3.6 percent sales decline. Restaurants have been reporting massive financial struggles this year as shoppers pull back on discretionary spending More shoppers are reaching for cost-cutting soups at the grocery store - that might not be a good sign for the economy The toxic mix of slowing sales and higher costs has spelled doom for hundreds of restaurant locations and some of America's most recognizable brands. In the past year and change, several iconic brands have filed for bankruptcy, including TGI Fridays, Red Lobster, Hooters, Bertucci's, and On The Border. The wave of closures highlights a broader reality: more Americans are trading nights out for meals at home — and not by choice. That belt-tightening is being echoed by low-cost retailers like Dollar General, which cater to budget-conscious consumers. Executives there are also seeing signs that financial stress is reshaping how people shop. 'Our customers continue to report that their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation,' CEO Todd Vasos said during Dollar General's fourth-quarter earnings call.
