Campbell's Q3 Earnings Top Estimates, Organic Sales Up on Volume Gains

The Campbell's Company CPB reported third-quarter fiscal 2025 results, with the top and bottom lines surpassing the Zacks Consensus Estimate. Quarterly earnings declined year over year while net sales increased. Results benefited from improved in-home consumption, especially in Meals & Beverages. While Snacks showed mixed performance, the company is refining its strategy to stay competitive across all brands amid a dynamic market.Reflecting its year-to-date performance, Campbell’s is reaffirming its full-year fiscal 2025 guidance originally issued on March 5, 2025, excluding the impact of tariffs. However, adjusted EBIT and adjusted earnings per share (EPS) are now projected to be at the lower end of the guidance range, primarily due to a slower-than-expected recovery in the Snacks segment. The tariff outlook remains uncertain amid ongoing legal challenges.The Campbell's Company Price, Consensus and EPS Surprise The Campbell's Company price-consensus-eps-surprise-chart | The Campbell's Company QuoteCPB’s Quarterly Performance: Key Metrics and InsightsAdjusted earnings were 73 cents, down 3% year over year, due to increased adjusted net interest expenses, partly made up by higher adjusted earnings before interest and taxes (EBIT). However, the bottom line beat the Zacks Consensus Estimate of 65 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Net sales of $2,475 million grew 4% year over year while surpassing the Zacks Consensus Estimate of $2,437.3 million. The year-over-year increase in the top line stemmed from the benefit of the Sovos Brands acquisition. Organic net sales rose 1%, mainly due to a 2% positive volume/mix impact, somewhat offset by planned lower net pricing.The company’s adjusted gross profit rose to $745 million from $740 million, while the adjusted gross profit margin declined 110 basis points (bps) to 30.1%. The margin decrease was primarily due to cost inflation, supply-chain expenses, unfavorable net pricing and acquisition-related impacts. These were somewhat mitigated by supply-chain productivity gains, cost-saving initiatives and favorable volume/mix.Adjusted marketing and selling expenses rose 5% to $207 million, primarily due to the impact of the recent acquisition. In contrast, adjusted administrative expenses declined 4% to $150 million, mainly reflecting benefits from cost-saving initiatives. This decrease was partially offset by higher general administrative costs, inflationary pressures and acquisition-related expenses. The adjusted EBIT increased 2% to $362 million.Decoding CPB’s Segmental PerformanceMeals & Beverages: Net sales reached $1,463 million, up 15% year over year, driven by the acquisition. Excluding the effects of the acquisition and the noosa divestiture, organic net sales grew 6%, driven by strong performance in U.S. soup, Rao’s pasta sauces and the Canada market, partially aided by favorable shipment timing. A 7% increase in volume/mix contributed to growth, partially offset by a 1% decline in net price realization. U.S. soup sales rose across key categories, including condensed soups, broth and ready-to-serve soups. Segment operating earnings rose 8%.Snacks: Net sales totaled $1,012 million, down 8% year over year. Excluding the impact of the Pop Secret divestiture, organic net sales were down 5%, primarily due to decreased sales of Goldfish crackers, third-party partner and contract brands, Snyder's of Hanover pretzels, Late July snacks and Lance sandwich crackers. The decline was caused by a 5% drop in volume/mix, with net price realization remaining flat. Segment operating earnings fell 13%.Looking at CPB’s Other Financial MetricsAs of the end of the reported quarter, Campbell's had cash and cash equivalents of $143 million and a total debt of $6,896 million. The company generated $872 million in net cash from operating activities for the nine months ended April 27, 2025. Capital expenditures were $296 million in the said period.CPB paid $343 million in cash dividends and repurchased nearly $60 million during the period. As of the end of the fiscal third quarter, the company had approximately $200 million remaining under its anti-dilutive share repurchase program and $301 million under the September 2021 strategic share repurchase program.As of the end of the fiscal third quarter, Campbell's generated almost $110 million in savings under its cost savings program of $250 million announced in September 2024.Image Source: Zacks Investment ResearchCPB’s Fiscal 2025 GuidanceThe company forecasts fiscal 2025 net sales growth of 6-8%. Organic net sales are expected to range from a 2% decline to flat year over year. Adjusted EBIT is estimated to grow 3-5%. The adjusted EPS is expected to decline 4-1%, in the range of $2.95-$3.05 compared with $3.08 reported in fiscal 2024.If the current tariff actions remain in effect, Campbell’s estimates an additional headwind of three-five cents per share to its fiscal 2025 adjusted EPS. This potential impact is not included in the company’s fiscal 2025 guidance, given the rapidly evolving tariff and trade landscape.Shares of this Zacks Rank #3 (Hold) company have lost 17.6% in the past three months compared with the industry's decline of 4.8%.Stocks to ConsiderNomad Foods Limited NOMD manufactures, markets and distributes a range of frozen food products in the United Kingdom and internationally. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Nomad Foods' current fiscal-year sales and earnings implies growth of 4.6% and 7.3%, respectively, from the prior-year levels. NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average.BRF S.A. BRFS raises, produces and slaughters poultry and pork for the processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank #2 (Buy). BRFS delivered a trailing four-quarter earnings surprise of 5.4%, on average.The Zacks Consensus Estimate for BRF S.A.'s current fiscal-year sales and earnings implies growth of 0.3% and 11.1%, respectively, from the prior-year levels.Oatly Group AB OTLY, an oatmilk company, provides a range of plant-based dairy products made from oats. It presently carries a Zacks Rank of 2. OTLY delivered a trailing four-quarter earnings surprise of 25.1%, on average.The consensus estimate for Oatly Group’s current fiscal-year sales and earnings implies growth of 2.7% and 65.8%, respectively, from the year-ago figures.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Campbell's Company (CPB): Free Stock Analysis Report BRF S.A. (BRFS): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis Report Oatly Group AB Sponsored ADR (OTLY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks