Campbell's, known originally as Campbell Soup, has recently announced disappointing fiscal second-quarter results for the year. The company's revenue for the three-month period that ended on January 26 reached $2.69 billion, indicating an increase from $2.46 billion in the same period last year. However, this figure fell short of analysts' expectations, as the FactSet-polled consensus was set at $2.74 billion.
The 9% increase in sales can be attributed largely to the acquisition of Sovos Brands, a strategic move aimed at bolstering their portfolio. Despite this growth, Campbell's experienced an organic net sales decline of 2%. This downturn, as noted by the company, was driven by 'net price realization with flat volume/mix', pointing to potential challenges within the market. In terms of profitability, the adjusted earnings per share (EPS) decreased to $0.74, down from $0.80 per share a year earlier, albeit above the expected consensus of $0.72.
The Chief Executive Officer, Mick Beekhuizen, addressed concerns over the company’s performance during the quarter, stating, 'Given the softness in some of our snacking categories, the anticipated sequential top-line improvement did not materialize during the quarter, and we now have a more muted second half expectation.' This caution hints at potential turbulence ahead for the brand. In a significant adjustment, Campbell's has lowered its adjusted EPS guidance for 2025 to a range of $2.95 to $3.05, down from its previous estimates of $3.12 to $3.22.
Current analyst projections are closely aligned with the former guidance, forecasting a $3.12 EPS. Furthermore, the company's full-year sales growth is now expected to range between 6% to 8%, a departure from the previous forecast of 9% to 11%. This shift indicates a more conservative outlook for the firm, with organic sales now projected to be flat or even down by 2%, contrasting the earlier expectation of growth by as much as 2%. In response to the results, Campbell's shares saw a decline of 2.6% intraday.
Beekhuizen, emphasizing his confidence in the company's future, remarked, 'We remain confident in our ability to successfully navigate the current consumer landscape with our portfolio of advantaged leadership brands, talented team and track record of execution. We have a strong foundation to deliver long-term sustainable, profitable growth and shareholder returns.' The shares traded at a price of 38.98, reflecting a change of -1.35 and a percent change of -3.35 during the reporting period..