Campbell's stock heads toward a 23-year low, as it warns of more price cuts to recharge demand

By Tomi Kilgore and Bill Peters

The parent of Goldfish snacks, Snyder's pretzels and Cape Cod chips sees snack sales drop again, and an increase in discounts and promotions won't help

Campbell's stock sinks toward a 23-year low after an earnings miss and lowered full-year outlook.

Shares of Campbell's were on pace for their lowest close in more than two decades Wednesday, after the soups and snacks maker lowered its full-year outlook and said it might have to get more aggressive on discounts and promotions on items like chips and Goldfish, as competition remains stiff and consumers remain cautious.

The remarks, made on Campbell's (CPB) earnings call, came after PepsiCo (PEP) last month said it cut prices on snacks like Doritos and Cheetos, following complaints from shoppers that they were too expensive, as packaged-food makers face more selective consumers grappling with years of price increases.

Shares of Campbell's - which along with its namesake soup sells Goldfish crackers, Snyder's pretzels, and potato chips like Cape Cod and Kettle Brand - sank 5.9% in recent afternoon trading. That puts the stock on track for its lowest close since May 20, 2003.

The selloff has pushed Campbell's market capitalization down to $6.92 billion, which is the second lowest of the S&P 500 index's SPX components.

During Campbell's call, CEO Mick Beekhuizen said it was important for the company to "improve our competitiveness from a pricing perspective." That was particularly true in Campbell's salty snacks segment, where chips have faced more competition from rivals looking to undercut one another on price.

He said that any price cuts or promotions wouldn't be across the board, and that the segment would get more competitive over the next several months. Still, he said, a bigger rebound would take time.

"It's going to be very surgical, and we're going to make sure that we are going to be competitive in the areas that matter during the times it also really matters," he said.

He also said the company might lean "a little bit more into promotional activity" on some larger Goldfish pack sizes "to make sure that we hit a good price point that's providing that value for the consumer."

As with others in the industry, he also said Campbell's would focus on "innovation" and making higher-end snacks in an effort to stand out more on store shelves. Consumer-goods makers have also dealt with steeper competition from retailers' own store brands, which usually sell at a lower price but are sometimes equal in quality. Target (TGT) on Wednesday announced price cuts on 3,000 items, including for some of its own store brands.

The company on Wednesday cut its outlook for fiscal 2026 organic net sales, which excludes acquired or divested assets, to a decline of between 2% and 1% from between a 1% decline and a 1% increase. For adjusted earnings per share, the guidance was lowered to $2.15 to $2.25, from its previous EPS of $2.40 to $2.55.

"Given our first half results and the current operating environment, we are lowering our full-year outlook to reflect a more cautious view for the balance of the year," Beekhuizen said.

The company, which removed the word soup from its name in late 2024 to show that it also sells snacks, reported the most weakness in that category in its fiscal second quarter. And it said it would accelerate cost-cutting plans as it looked to "stabilize" the snacks business.

Sales in the meals and beverages business, which includes the iconic namesake soup brand, also declined, as weakness in Campbell's soups, Prego pasta sauces and V8 beverages was only partially offset by growth in Rao's sauces.

Net sales for the quarter to Feb. 1 were down 4.5% from a year ago to $2.56 billion - the second straight year-over-year decline - to miss the average analyst estimate compiled by FactSet of $2.61 billion.

That included a 6.2% drop in snacks sales to $914 million and a 3.7% decline in meals and beverages sales to $1.65 billion.

Net income for the quarter slumped 16.2% to $145 million, while adjusted earnings per share, which excludes nonrecurring items, of 51 cents was below the FactSet consensus of 57 cents. That was the first bottom-line miss since the fiscal fourth quarter of 2023.

The stock has shed 41.9% over the past 12 months, while the State Street Consumer Staples Select Sector SPDR ETF XLP has gained around 4.1% and the S&P 500 has advanced 21.4%.

-Tomi Kilgore -Bill Peters

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03-11-26 1429ET