CPB · Q3 2025 Earnings

Cautious

Campbell's Company (The)

Reported December 9, 2025

30-second summary

Campbell's opened FY2026 with organic net sales –1% (Meals & Beverages –2%, Snacks –1%), adjusted EPS of $0.77, and adjusted gross margin of 29.9% — all consistent with the FY guide of –1% to +1% organic and EPS $2.40–$2.55 reaffirmed off the September 3 print. The substantive change isn't in the headline numbers, which landed where they had to; it's that tax rate, interest expense, share count, capex, and tariff exposure/mitigation — all quantified ranges last quarter — were dropped from the guidance framework with no replacement disclosure. Adjusted gross margin breaking below the 30% line on the first print of the year, down 150 bps YoY, with tariff math no longer publicly tracked, is the real signal.

Headline numbers

EPS

Q3 FY2025

$0.77

Revenue

Q3 FY2025

$2.68B

-3.0% YoY

Gross margin

Q3 FY2025

29.6%

Free cash flow

Q3 FY2025

$0.10B

Operating margin

Q3 FY2025

12.6%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$2.68B	-3.0%	$2.32B	+15.3%
EPS	$0.77	—	$0.62	+24.2%
Gross margin	29.6%	—	30.4%	-80bps
Operating margin	12.6%	—	11.6%	+100bps
Free cash flow	$0.10B	—	—	—

Guidance

Campbell's reaffirms full-year FY2026 adjusted EPS ($2.40–$2.55) and organic net sales ((1)% to +1%) guidance; several operational metrics (tax rate, interest expense, capex, tariff impact) withdrawn from disclosure this quarter.

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Adjusted Effective Tax Rate	FY2026	approximately 24%	Withdrawn — no replacement	—	Withdrawn
Adjusted Interest Expense	FY2026	$320 million to $325 million	Withdrawn — no replacement	—	Withdrawn
Diluted Share Count	FY2026	approximately 300 million shares	Withdrawn — no replacement	—	Withdrawn
Capital Expenditures	FY2026	approximately 4% of net sales	Withdrawn — no replacement	—	Withdrawn
Estimated Tariff Impact	FY2026	Gross tariffs approximately 4% of COPS with mitigation of approximately 60%	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Adjusted EPS ($2.40 to $2.55), Organic Net Sales ((1)% to +1%), Adjusted EBIT ((13)% to (9)%)

Segment performance

Q3 FY2025

Segment	Q3 FY2025	YoY
Meals & Beverages	$1.665B	-4.0%
Snacks	$1.012B	-2.0%
Meals & Beverages Organic Growth	-2%	—
Snacks Organic Growth	-1%	—

Platform metrics

Q3 FY2025

Segment	Q3 FY2025
Organic Net Sales Growth	-1%
Cost Savings Delivered	$15 million

Profitability

Q3 FY2025

Segment	Q3 FY2025
Adjusted EBIT	$383 million
Adjusted Gross Profit Margin	29.9%
Operating Cash Flow	$224 million

Other KPIs

Q3 FY2025

Segment	Q3 FY2025
Shareholder Returns (Dividends + Buybacks)	$144 million

Management tone

No earnings call transcript was available for this quarter; tone analysis is deferred. The press-release framing itself is the signal worth noting. Last quarter's release introduced FY26 with explicit, quantified ranges for tax rate, interest expense, share count, capex, and a detailed tariff bridge — disclosure that improved relative to Q3 FY25's overlay framing. This quarter's release reaffirms the three headline lines (EPS, organic, EBIT) and drops the rest, while introducing a new framing element: that the pending transaction will be "neutral" to FY26 EPS. The arc from "expand tariff disclosure into a quantified bridge" (Q4 FY25) to "withdraw the tariff bridge entirely" (Q1 FY26) is a step-down in operational transparency at the precise moment the FY guide depends on tariff mitigation execution.

Answers to last quarter's watch list

Q1 FY2026 organic net sales by segment — Meals & Beverages organic was –2% (improved from Q4's –3%), and Snacks organic was –1% (improved from Q4's –2%). Both segments are still in decline but the pace of deterioration eased; total organic of –1% sits at the bottom of the FY (1)% to +1% range. The FY low end is not in immediate jeopardy but there is no margin for further softening.

Continue monitoring

Tariff mitigation execution — The ~4% of COPS gross exposure and ~60% mitigation framework was withdrawn from disclosure with no replacement figure. The single most important operational variable in the FY26 EPS bridge is no longer publicly trackable.

Resolved negatively

Marketing investment phasing — The press release does not break out marketing & selling as a percentage of sales for Q1, and the FY guide of 9–10% of net sales was not restated. Without disclosure of H1 phasing or share gains in Snacks, the question is unanswered on the print.

Not resolved

Adjusted gross margin compression — Q1 adjusted gross margin came in at 29.9%, down 150 bps YoY from 31.4%, below the 30% line flagged as the threshold for tariff-mitigation lag. The full-year guide implies further compression from here given the EBIT (13)% to (9)% framework. The first data point points the wrong way.

Resolved negatively

Cost savings program pace — $15M delivered in Q1 against a $70M incremental FY26 target — a roughly 21% Q1 take, consistent with a slightly back-weighted year. On-pace but with no acceleration cushion if tariff mitigation lags.

Continue monitoring

What to watch into next quarter

Adjusted gross margin trajectory — Q1 broke below 30% at 29.9%, down 150 bps YoY. Watch whether Q2 holds the 29.5%+ range or breaks toward the 29% line, which would imply the FY EBIT (9)% upside scenario is off the table.

Snacks organic inflection — three quarters of organic decline (–5%, –2%, –1%) shows the pace easing but the segment has not yet inflected. A Q2 print at zero or positive would validate the FY (1)% to +1% organic guide; another negative print pressures it.

Tariff disclosure reinstatement — does management restore the gross exposure and mitigation rate framework, or has the simplification become permanent? Without it, the FY26 EPS bridge is a black box from the outside.

Transaction close mechanics and pro-forma disclosure — management has flagged H2 FY2026 close and EPS neutrality. Watch for the pro-forma framework (which businesses move, what the comparable base becomes) and whether the "neutral" framing survives signing-to-close.

Free cash flow vs. shareholder return pace — Q1 FCF of $97M against $144M of dividends and buybacks means cash returns ran ahead of generation in the seasonally light first quarter. Watch the H1 cumulative gap and whether buyback pace moderates if EBIT trends to the low end.

Sources

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

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