Campbell Soup Company: At its lowest since 2019

Published: 2025-06-05 05:17:38 ET CPB

Published on 06/05/2025 at 05:17

By Adrien Chavanne

The iconic soup and snack seller is no longer popular. Its share price is depressed, at its lowest since 2019. Q3 results, released earlier this week, offer little consolation.

At first glance, Campbell Soup would appear to be well positioned to benefit from the current environment. Americans have not cooked at home as much since the lockdown. Inflation, macroeconomic pressure and, more recently, fears over tariffs have prompted people to cut back on leisure spending and focus on essential purchases.

However, despite various price increases passed on to customers, the company has not been spared by inflation in costs, labor, transportation, and promotional expenses. Volumes have also come under significant pressure as low-income shoppers and seniors have gradually turned to cheaper brands.

This has complicated the group's situation. This is particularly true as the Snacking division, which accounts for 41% of sales, is no longer growing, with a further decline of 8% this quarter. "We are not satisfied with the snack results," admits CFO Carrie Anderson. On the other hand, consumers remain loyal overall to the group's various brands of ready meals and beverages, even though double-digit growth is largely influenced by the acquisition of the Sovos Brands group.

Management has announced that concrete measures should help to revive the business, particularly the snacking division: these include enhanced marketing campaigns around the Goldfish snack brand ahead of the back-to-school season and the launch of new products such as Pop'ums, a combination of pretzels and popcorn. The primary objective is to regain commercial momentum.

Annual targets remain unchanged—sales growth of 6% to 8% and adjusted EPS of $2.95 to $3.05—but results are likely to be at the lower end of the range. This is due to the sluggish recovery of the snack business, as we have seen, and pricing pressures, which could have an impact of 3 to 5 cents per share. Campbell is facing increases on several fronts: surcharges on steel and aluminum used in packaging, surcharges on imports of Italian sauces, and tariffs on its products exported to Canada. Various options are being explored, including logistics reorganization, sourcing new suppliers, and price increases. However, it is difficult to imagine how the latter could be implemented without further penalizing volumes...

The recovery of Campbell Soup, which is modernizing its official name to The Campbell's Company, will require a tangible revival of the snack segment. For the time being, the situation offers little visibility.

Adrien Chavanne