The Campbell’s Company (NASDAQ:CPB) stock fell Monday after the packaged food maker reported third-quarter results that topped earnings expectations but missed on revenue as inflation, tariffs, and weaker demand weighed on performance.

Campbell’s Earnings And Margins Under Pressure

Adjusted earnings were 50 cents a share, ahead of the Wall Street estimate of 48 cents. Revenue declined 4% year over year to $2.366 billion, missing analysts’ expectations of $2.381 billion.

The company said lower volumes and an unfavorable product mix more than offset pricing gains.

Adjusted gross profit fell 12% from a year earlier to $656 million, while adjusted gross margin narrowed 240 basis points to 27.7%. Campbell’s cited inflationary pressures, tariff-related costs, and broader supply chain expenses. Adjusted EBIT dropped 24% to $274 million as lower gross profit weighed on results.

Cost Savings And Cash Generation

For the first nine months of fiscal 2026, operating cash flow totaled $839 million, and capital expenditures were $297 million. The company ended the quarter with $402 million in cash and cash equivalents.

Campbell’s returned $380 million to shareholders year to date, primarily through dividends.

The company generated about $20 million in savings during the quarter, bringing cumulative savings under its fiscal 2028 cost-reduction program to $200 million. Management is targeting $375 million in total savings and expects those efforts to help offset tariff and inflationary pressures.

Meals, Beverages, and Snacks Remain Weak

The Meals & Beverages segment posted a 4% decline in reported and organic net sales, driven by a 5% unfavorable volume and mix impact. U.S. soup sales fell 8%, primarily because of weakness in the condensed and ready-to-serve categories.

Operating earnings for the segment declined 16% as tariffs, cost inflation, supply chain pressures, and weaker volume reduced profitability.

The Snacks business also reported a 4% decline in reported and organic sales, reflecting a 6% drop in volume and mix. The company pointed to weakness in its salty snacks portfolio, including crackers and fresh bakery products, as well as lower third-party and contract manufacturing sales.

Snacks’ operating earnings fell 32% because of higher input costs, tariffs, and an unfavorable sales mix.

Campbell’s Outlook Reaffirmed

Campbell’s reaffirmed its fiscal 2026 adjusted earnings outlook of $2.15 to $2.25 a share, compared with the Wall Street consensus estimate of $2.17.

Management expects a tariff refund benefit of 3 cents to 4 cents a share in the fourth quarter, although it said the gain is likely to be fully offset by higher fuel costs. The company also indicated that the lower end of its annual sales guidance range is the more realistic outcome.

Looking ahead, Campbell’s said fiscal 2027 could face inflationary headwinds of about 5% to 6%, driven by higher oil prices and other cost pressures. The company plans to offset those challenges through productivity gains, cost-cutting initiatives and selective pricing actions.

During the earnings call, CFO Todd Cunfer said, “The one thing that is looking more and more clear every day is that the first half inflation will be pretty high,” adding that lower oil prices would take time to flow through to commodities such as fertilizer and aluminum, as well as logistics costs.

He also noted that even if the conflict ended immediately, it would take time for those input costs to normalize, reinforcing the view that Campbell’s expects elevated inflation to persist into the first half of fiscal 2027.

Management is pursuing additional efficiency measures, including a targeted $100 million reduction in selling, general, and administrative expenses and an early retirement program. The company also said it has no current plans to increase its dividend and is evaluating hybrid debt instruments to support its credit profile.

Within the snacks business, Campbell’s is streamlining lower-priority products and focusing investment on key brands, including Goldfish, while seeking to improve cost efficiency and trade spending returns. The company also sees organic growth opportunities in meals and beverages, supported by continued demand for at-home food consumption and new product innovation.

CPB Price Action: Campbell’s shares were down 1.68% at $21.31 at the time of publication on Monday, according to Benzinga Pro data.

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