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December 11, 2025 • 4 min read
The goal of today’s analysis is to peel back the lid on the latest financial performance of The Campbell’s Company (CPB). By dissecting their most recent 10-Q filing, we can look beyond the brand's iconic red-and-white soup cans to understand how the business is navigating a challenging economic environment defined by inflation and shifting consumer habits.
For those unfamiliar with the deeper portfolio, Campbell’s is a major player in the North American food industry. Beyond their namesake soups, they own a massive snacking empire including Goldfish, Pepperidge Farm, Snyder’s of Hanover, and Kettle Brand, as well as meal staples like Prego and Pace.
To understand how Campbell's converts grocery sales into profit, the following Sankey diagram visualizes the flow of money through their income statement for the three months ended November 2, 2025 (Fiscal Q1 2026).
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For the quarter, Campbell’s reported Net Sales of $2.68 billion, a decrease of 3% compared to the same period last year ($2.77 billion).
The primary driver behind this decline is a 3% drop in volume/mix. In plain English, this means consumers are buying fewer units of soup and snacks than they did a year ago. While the company did realize a 1% benefit from net pricing (charging more for products), it wasn't enough to offset the drop in volume or the impact of divestitures, such as the sale of the Pop Secret popcorn business.
This dynamic highlights a critical risk for consumer packaged goods (CPG) companies right now: price elasticity. As prices rise to combat inflation, consumers are increasingly tightening their belts or switching to private-label generic brands.
Moving down the income statement, Gross Profit came in at $792 million, resulting in a gross margin of roughly 29.6%. Margins contracted by 170 basis points compared to the prior year. The company cited significant headwinds from cost inflation and supply chain costs, which had a negative impact of approximately $520 million. While productivity improvements helped offset some of this pain, the net result was less profit for every dollar of sales generated.
Operating Income settled at $336 million, an 8.4% decrease year-over-year. Consequently, Net Earnings attributable to the company fell to $194 million (or $0.65 per share), down from $218 million ($0.72 per share) in the previous year.
Campbell's reports its operations in two main segments, both of which faced headwinds this quarter:
To combat these inflationary pressures, Campbell's is actively cutting costs. The filing details $18 million in pre-tax charges related to cost savings and optimization initiatives for the quarter. These charges are part of a broader restructuring effort involving severance and asset impairments aimed at streamlining operations.
Additionally, the company noted $2 million in costs associated with a "pending acquisition." While the filing doesn't elaborate deeply on the target in this specific note, it signals that despite operational challenges, management is still looking to grow the portfolio through M&A.
This quarter illustrates the heavy lifting required by legacy food manufacturers in the current market. Campbell's is fighting a battle on two fronts: managing internal costs that are rising due to inflation, and retaining customers who are becoming more price-sensitive.
While the company remains profitable with a solid operating margin of 12.6%, the decline in volume across both Meals and Snacks suggests that pricing power may be reaching a ceiling. As Campbell's competes against giants like General Mills and Kraft Heinz, as well as retailer-owned private labels, their ability to stabilize volumes while executing their cost-savings programs will be the key metric to watch in the coming quarters.
Last updated: December 11, 2025