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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
Bloomberg
28-05-2025
- Business
- Bloomberg
Abercrombie Surges on Raised Outlook After Tallying Tariff Cost
Abercrombie & Fitch Co. shares rose sharply in premarket trading Wednesday after the retailer upped its full-year outlook, suggesting the retailer is confident in its ability to navigate the changing tariff landscape. The fashion retailer now sees full year net sales growth of 3% to 6% up from its estimate of 3% to 5% in March. This included approximately $50 million of tariff expenses.
