CPB · Q2 2026 Earnings

Bearish

Campbell's Company (The)

Reported March 11, 2026

30-second summary

Campbell's lowered FY2026 guidance across all three forward metrics three months after reaffirming them: adjusted EPS now $2.15–$2.25 (midpoint $2.20 vs prior $2.475, a $0.25 / 11% cut), organic net sales (2)% to (1)% (was (1)% to +1%), and adjusted EBIT (20)% to (17)% (was (13)% to (9)%). Q2 itself printed adjusted EPS $0.51 on revenue of $2.56B (–5% YoY, organic –3%), with Snacks segment margin down 390bps and adjusted gross margin breaking to 27.7% — 220bps below the 29.9% Q1 print that itself had broken the 30% line. The "slower Snacks recovery" framing the company has used for four quarters has now become a guided full-year Snacks decline with no inflection in sight, and the FY26 EBIT envelope worsened by roughly 8 percentage points in a single quarter.

Headline numbers

EPS

Q2 FY2026

$0.51

Revenue

Q2 FY2026

$2.56B

-5.0% YoY

Gross margin

Q2 FY2026

28.0%

Operating margin

Q2 FY2026

10.6%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$2.56B	$2.32B	+10.5%	$2.68B	-4.2%
EPS	$0.51	$0.62	-17.7%	$0.77	-33.8%
Gross margin	28.0%	30.4%	-240bps	29.6%	-160bps
Operating margin	10.6%	11.6%	-100bps	12.6%	-200bps

Guidance

Campbell Soup significantly lowered full-year FY2026 guidance across all three forward metrics (EPS, organic sales, EBIT), citing a more cautious view for the balance of the year driven primarily by Snacks business weakness and incremental trade investments.

Guidance is issued for both next quarter and the full year. Both may appear below.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY 2026	$2.40 to $2.55	$2.15 to $2.25	-$0.20 to -$0.30 (midpoint lowered by $0.25)	Lowered
Organic Net Sales	FY 2026	(1)% to +1%	(2)% to (1)%	-1 to 0 percentage points (range shifted negative)	Lowered
Adjusted EBIT	FY 2026	(13)% to (9)%	(20)% to (17)%	-7 to -8 percentage points (range shifted significantly more negative)	Lowered

Segment performance

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Meals & Beverages	$1.65B	$1.202B	+37.3%
Snacks	$0.914B	$1.119B	-18.3%
Meals & Beverages Operating Earnings	$252M	—	—
Snacks Operating Earnings	$67M	—	—

Platform metrics

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Organic Net Sales Growth	-3.0%	—	—
Cost Savings Delivered (Cumulative FY2028 Target)	$180M of $375M	—	—
Rao's Trailing Twelve-Month Net Sales	>$1.0B	—	—

Profitability

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Adjusted Gross Margin	27.7%	—	—
Adjusted EBIT	$282M	$321M	—
Adjusted Effective Tax Rate	24.8%	—	—

Management tone

Q3 FY25 "slower Snacks recovery" → Q4 FY25 "FY26 EBIT down 9–13%, tariffs own two-thirds" → Q1 FY26 "reaffirm and withdraw five operational lines" → Q2 FY26 "more cautious view, EBIT down 17–20%, incremental trade investments."

Three quarters ago management framed Snacks as a temporary recovery problem; two quarters ago it became a tariff-driven margin story with FY26 guided down 12–18% on EPS; this quarter Snacks is back at the center of the cut and the EBIT decline has nearly doubled. The press release says management is "lowering its full-year fiscal 2026 guidance provided on December 9, 2025 to reflect a more cautious view for the balance of the year, largely driven by the near-term outlook for our Snacks business and select incremental trade investments." That phrase — "select incremental trade investments" — is the operational concession: the company is paying for shelf space and promotional support in chips and bakery that was not in the original FY26 plan. The cumulative arc is a step-function admission that the snacks platform requires structural reinvestment, not cyclical patience.

The disclosure step-down flagged last quarter (tariff bridge, tax rate, interest, share count, capex all withdrawn) was not reversed. Two consecutive quarters of FY guide cuts off a base that lost its quantified bridge mean external bridges to the new $2.20 midpoint cannot be independently rebuilt. The "neutral to FY26 EPS" framing on the pending transaction also did not reappear in this release.

Q&A highlights

Andrew Lazar · Barclays

Snacks top-line performance in goldfish, fresh bakery, and salty; competitive intensity in salty and pricing strategy (everyday pricing vs. promotional); 7% SNAC segment margin decline and outlook for next quarters

Goldfish momentum to continue; fresh bakery headwinds expected in Q3 due to self-inflicted promotional reduction, normalization by Q4; salty strategy focused on surgical promotional activity in chips with potential selective list price adjustments; margin improvement expected in Q3 but more significantly in Q4 due to stabilization, lower marketing spend, and strong goldfish mix

SNAC segment margin down 390 basis points in Q2About 25% of margin decline from bakery performance, 75% from net sales deleverageExpected margin improvement in Q3, significant improvement in Q4Goldfish is highest margin product line in snacks portfolio

Megan Klopp · Morgan Stanley

3Q to 4Q cadence for operating EBIT and margins; snacks margin profile improvement in Q4; organic sales expectations for snacks in second half

Q4 should see improvement from Q3 due to: Sovos ERP volume lapping benefit, snacks stabilization (not to prior levels), tariff comparisons easing, and lower advertising spend YoY. Snacks expected to decline ~4% in second half, fairly balanced between Q3 and Q4 with slight Q4 improvement; margins will stabilize and improve but not return to prior levels

Snacks expected down ~4% in second half (H2)Margins will improve Q3 to Q4 but not return to prior bright levelsTariff headwind comparison eases in Q4Q4 advertising spend down YoY

Max Gumport · BNP Paribas

Snacks recovery timeline and why management believes normalized growth is achievable when volumes haven't grown in couple years; capacity utilization impact from Richmond Goldfish facility expansion; ability to fill expanded capacity

Goldfish positioned to grow due to brand strength, differentiation, and better-for-you credentials; bakery cookies growing 4 consecutive quarters with innovation; fresh bakery to return to flattish; salty brands in growing subcategories (pretzels growing, kettle chips growing); chips facing competitive pressure but brands well-positioned. Richmond expansion created deleverage as volumes declined; management job is to get goldfish volume back to improve P&L

Cookies business grown 4 quarters in a rowPretzel subcategory growing; Snyder's of Hanover showing progressKettle chips subcategory growing; competition increased over past 12-24 monthsGoldfish volume decline contributed to 7% margin due to fixed cost deleverage

Peter Galbo · Bank of America

Why promotional tactics versus list price shifts on chips when largest competitor moving to permanent everyday price reductions; EPS cadence expectations for back half

Taking surgical promotional approach focused on key channels and moments; acknowledges competitor's everyday price strategy but believes promotional can resolve most competition; selective list price adjustments possible if gaps too large but expects smaller than trade component. Brands like Kettle have right to win positioning. Work is underway. Q3 similar to Q2, Q4 normal step down to hit 90 cents guidance

Promotional activity focused and surgical, not across-the-boardSelective list price adjustments possible but smaller than trade componentKettle brand positioned in growing subcategoryBack half EPS: Q3 similar to Q2, Q4 step down to reach 90 cents midpoint

Michael Lavery · Piper Sandler

Marketing spend shift to promo; is company handcuffed by leverage or are there right trade-offs between marketing and pricing investments; price pack architecture timeline and list price adjustment status

Marketing spend will be up YoY despite shift to trade; company pursuing balanced approach, selective on dollars between trade and marketing. Goldfish and Rails getting continued marketing support. Price pack architecture changes taking time if package format changes required; some changes like goldfish multi-packs already working. Promotional activity is current focus, list price adjustments under consideration but selective. Work is underway with some shorter-term activity and longer-term price slope alignment

Marketing spend up YoY but being redirected toward promotional activityGoldfish multi-packs working well in promotional strategyPrice per ounce slopes out of alignment in some sizes, need correctionList price adjustments under consideration, not yet decided

Answers to last quarter's watch list

Adjusted gross margin trajectory — Q2 adjusted gross margin printed 27.7%, breaking not just the 29.5% threshold but also the 29% and 28% lines flagged. This is a 220bps sequential drop from Q1's 29.9% and resolves the "FY EBIT –9% upside scenario" question — that scenario is gone, the full-year EBIT range is now (20)% to (17)%.

Resolved negatively

Snacks organic inflection — Snacks reported –6% in Q2, deteriorating from Q1's –1% organic and Q4 FY25's –2%. The pace-easing pattern of the prior three quarters reversed; Snacks is now expected down ~4% in H2 per Q&A commentary. The FY (1)% to +1% organic guide collapsed to (2)% to (1)% explicitly because Snacks did not inflect.

Resolved negatively

Tariff disclosure reinstatement — The Q1 FY26 disclosure simplification was not reversed. The press release attributes the guide cut to "near-term outlook for our Snacks business and select incremental trade investments" — tariffs are not separately requantified. The bridge from $2.475 to $2.20 cannot be externally split between tariff drag and operational trade investment.

Resolved negatively

Transaction close mechanics and pro-forma disclosure — The pending transaction was not mentioned in the released materials, and the prior "neutral to FY26 EPS" framing did not reappear.

Not resolved

Free cash flow vs. shareholder return pace — Cash flow figures were not disclosed in the press release excerpt. With FY26 EBIT now guided down 17–20% off the $1.49B FY25 base, implied FY26 adjusted EBIT is ~$1.19B–$1.24B, materially compressing the cash envelope against a dividend run rate roughly unchanged.

Continue monitoring

What to watch into next quarter

Q3 FY2026 adjusted gross margin — management indicated Q3 EPS "similar to Q2" with margin improvement deferred to Q4. Watch whether Q3 holds the 27.7% Q2 floor or breaks further; a sub-27% print would imply the new FY (20)% EBIT low end is itself at risk.

Snacks segment margin recovery — Q2 printed 7.3%, down 390bps YoY. Management guided to "improvement in Q3, significant improvement in Q4." A Q3 print at or below 7.3% would mean the H2 EBIT bridge is breaking before Q4 has to deliver.

Goldfish volume direction — management's stated thesis is that Goldfish volume recovery fixes Richmond capacity deleverage. Watch whether organic Goldfish volume turns positive in Q3; if not, the structural Snacks margin recovery narrative is in question.

Trade investment cadence — "select incremental trade investments" was cited as a driver of the cut. Watch whether H2 trade spending escalates further (forcing another guide cut) or stabilizes at the implied Q2 step-up level.

Pending transaction and tariff bridge disclosure — two prior watch items unresolved. Either piece of disclosure returning would meaningfully change the externally-modelable EPS bridge to FY27.

Sources

Campbell's Q2 FY2026 press release (exhibit 99.1), filed via SEC EDGAR: https://www.sec.gov/Archives/edgar/data/16732/000001673226000004/exhibit991-q22026.htm
Campbell's Q1 FY2026 press release (prior-period guidance reference): https://www.sec.gov/Archives/edgar/data/16732/000001673225000125/exhibit991-q12026.htm
Campbell's Q4 FY2025 press release (FY26 original guide reference): https://www.sec.gov/Archives/edgar/data/16732/000001673225000105/exhibit991-q42025.htm

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