The Campbell’s Company has lowered its fiscal 2025 sales and profit guidance, citing “softness” in some snacking categories.
Mick Beekhuizen, who took over as CEO at the start of February from Mark Clouse, said Campbell’s “second-quarter earnings were in line with our expectations despite the dynamic operating environment”.
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However, he added in the results announcement yesterday (5 March): “Given the softness in some of our snacking categories, the anticipated sequential top-line improvement did not materialise during the quarter, and we now have a more muted second-half expectation.”
The maker of Snyder’s of Hanover snacks now projects full-year reported net sales growth of 6% to 8%, down from the 9% to 11% forecast provided last August and reaffirmed at the first-quarter results stage in December.
Organic net sales are expected to be flat to down 2%, compared to up 2% to flat previously.
For the second quarter ended 26 January, the company reported group net sales increased 9% to $2.7bn, driven by the Sovos Brands acquisition.
However, organic net sales decreased 2% to $2.4bn due to net price realisation with flat volume/mix.
For Campbell’s snacks division, reported sales dropped 6% and organic revenue fell 3% to $1bn. Volume/mix was down 2% with a 1% price decline.
Meals and beverages, which includes soups and the Sovos portfolio, saw sales rise 21% to $1.7bn but they dropped 1% on an organic basis. Volume/mix was a positive 1% with pricing down 2%.
Meanwhile, Campbell’s also lowered its outlook for adjusted operating profit or EBIT, and earnings per share.
The soup and snacks maker now expects adjusted EBIT to grow by 3% to 5%, lower than the previous estimate of 9% to 11%.
Similarly, adjusted EPS is anticipated to range between $2.95 and $3.05, compared to the earlier forecast of $3.12 to $3.22.
The new EPS guide reflects a movement of minus 1-4%, versus the prior projection for growth of 1-4%.
Campbell’s said its revised guidance takes into account the sale of the Noosa yogurt business, which was completed in February.
The company, which was renamed from Campbell Soup Co. in November, said the guidance does not take into account any impact from the import tariffs put in place this week by the Trump administration.
“The company’s guidance does not reflect any impact from potential import tariffs by the US government and potential retaliatory actions taken by other countries, given the tariff and trade environments are uncertain and rapidly evolving,” Campbell’s said in the results commentary.
Elsewhere in the second-quarter results, EBIT increased 3% to $327m, with adjusted EBIT up 2% at $372m, “primarily due to the acquisition’s [Sovos] contribution, partially offset by lower adjusted EBIT in the base business”.
EPS decreased 15% to $0.58 per share and was down 8% at $0.74 on an adjusted basis.
Campbell’s shares closed trading yesterday down 2.9% at $39.18 and were heading lower in pre-market trading today.
