The Campbell's Company
06/08/2026 | Press release | Distributed by Public on 06/08/2026 05:27
Quarterly Report for Quarter Ending May 3, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
OVERVIEW
This Management's Discussion and Analysis of Financial Condition and Results of Operations is provided as a supplement to, and should be read in conjunction with, the Consolidated Financial Statements and the Notes to the Consolidated Financial Statements in "Part I - Item 1. Financial Statements," and our Form 10-K for the year ended August 3, 2025, including but not limited to "Part I - Item 1A. Risk Factors" and "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations."
Executive Summary
Unless otherwise stated, the terms "we," "us," "our" and the "company" refer to The Campbell's Company and its consolidated subsidiaries.
We are a manufacturer and marketer of high-quality, branded food and beverage products. We operate in a highly competitive industry and experience competition in all of our categories.
On August 26, 2024, we completed the sale of our Pop Secret popcorn business. On February 24, 2025, we completed the sale of our noosa yoghurt business. For additional information on the divestitures, see Note 4 to the Consolidated Financial Statements.
Through the fourth quarter of 2025, the snacking and meals and beverages retail business in Latin America was managed under our Snacks segment. Beginning in 2026, the business is managed under our Meals & Beverages segment. Segment results have been adjusted retrospectively to reflect this change.
Recent Developments
On December 8, 2025, we entered into purchase agreements to acquire 49% of the issued and outstanding equity interests of La Regina di San Marzano di Antonio Romano S.p.A. (La Regina SPA) and La Regina Atlantica, LLC (La Regina Atlantica, and together with La Regina SPA, La Regina). La Regina currently produces all of our Rao's tomato-based pasta sauces. The aggregate consideration for the transaction is $286 million to be paid in two tranches. Subsequent to the end of the third quarter, we acquired the 49% interests in La Regina on May 4, 2026 for $146 million in cash. The remaining 51% of the outstanding equity interests of La Regina are subject to a call option granted to us and a put option granted to La Regina. For additional information on this transaction, see our Form 8-K filed with the U.S. Securities and Exchange Commission on December 9, 2025, and Note 3 to the Consolidated Financial Statements.
Business Trends
Our industry continues to navigate a dynamic operating and regulatory environment driven by commodity cost volatility, supply chain pressures, tariffs and shifting global trade policies, evolving consumer purchasing and spending patterns and other economic uncertainties. On a year-to-date basis, through the third quarter, we have experienced elevated input cost inflation, impacts from tariffs and other supply chain costs. We expect elevated inflationary pressures to persist through the remainder of 2026 and anticipate the need to benefit from continued supply chain productivity, cost savings initiatives and tariff mitigation efforts to offset some of these costs. We expect consumer trends to continue to evolve and our volumes to improve over time; however, shifting consumer behaviors, economic pressures, and the challenges of persistent inflation may continue to negatively impact our volumes throughout 2026. Although we have no operations in the Middle East, the ongoing geopolitical conflicts in that region, including between Iran and the United States, have caused significant disruption to energy supplies and increases in global energy prices, which has heightened inflationary pressures, disrupted global supply chains and adversely impacted consumer spending patterns. As the situation is rapidly changing, we will continue to evaluate the evolving macroeconomic environment and take actions to mitigate the impact on our business, consolidated results of operations and financial condition.
Summary of Results
This Summary of Results provides significant highlights from the discussion and analysis that follows.
•Net sales decreased 4% in the quarter to $2.366 billion primarily due to unfavorable volume/mix and the impact of the noosa divestiture, partially offset by favorable net price realization.
•Gross profit, as a percent of sales, was 27.5% in 2026 compared to 29.4% in the prior-year quarter. The decrease was primarily due to the gross impact of tariffs and the impact of cost inflation and other supply chain costs, partially offset by benefits from supply chain productivity improvements and favorable net price realization.
•Earnings per share were $.41 in 2026, compared to $.22 in the prior-year quarter. The current quarter included expenses of $.09 per share and the prior-year quarter included expenses of $.51 per share from items impacting comparability as discussed below.
Net Earnings attributable to The Campbell's Company
The following items impacted the comparability of net earnings and net earnings per share:
•We implemented several cost savings initiatives in recent years. In the third quarter of 2026, we recorded Restructuring charges of $9 million and implementation costs and other related costs of $38 million in Other expenses / (income), $12 million in Cost of products sold, $6 million in Administrative expenses, $1 million in Marketing and selling expenses and $1 million in Research and development expenses related to these initiatives. In the third quarter of 2025, we recorded Restructuring charges of $6 million and implementation costs and other related costs of $7 million in Cost of products sold, $7 million in Administrative expenses, and $1 million in Research and development expenses related to these initiatives. Year-to-date in 2026, we recorded Restructuring charges of $15 million and implementation costs and other related costs of $38 million in Other expenses / (income), $28 million in Cost of products sold, $21 million in Administrative expenses, $3 million in Marketing and selling expenses and $2 million in Research and development expenses related to these initiatives. Year-to-date in 2025, we recorded Restructuring charges of $17 million and implementation costs and other related costs of $26 million in Administrative expenses, $25 million in Cost of products sold, $3 million in Research and development expenses and $2 million in Marketing and selling expenses related to these initiatives.
In the second quarter of 2024, we began implementation of an optimization initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network. In the third quarter of 2026, we recognized $2 million in Marketing and selling expenses related to this initiative. In the third quarter of 2025, we recognized $9 million in Marketing and selling expenses and $1 million in Administrative expenses related to this initiative. Year-to-date in 2026, we recognized $20 million in Marketing and selling expenses related to this initiative. Year-to-date in 2025, we recognized $17 million in Marketing and selling expenses and $1 million in Administrative expenses related to this initiative.
In the third quarter of 2026, the total aggregate impact related to the cost savings and optimization initiatives was $69 million ($52 million after tax, or $.17 per share). In the third quarter of 2025, the total aggregate impact related to the cost savings and optimization initiatives was $31 million ($24 million after tax, or $.08 per share). Year-to-date in 2026, the total aggregate impact related to the cost savings and optimization initiatives was $127 million ($96 million after tax, or $.32 per share). Year-to-date in 2025, the total aggregate impact related to the cost savings and optimization initiatives was $91 million ($70 million after tax, or $.23 per share). See Note 8 to the Consolidated Financial Statements and "Restructuring Charges, Cost Savings Initiatives and Other Optimization Initiatives" for additional information;
•In the third quarter of 2026, we recognized gains in Cost of products sold of $6 million ($5 million after tax, or $.02 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges. In the third quarter of 2025, we recognized losses in Cost of products sold of $10 million ($7 million after tax, or $.02 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges. Year-to-date in 2026, we recognized gains in Cost of products sold of $20 million ($15 million after tax, or $.05 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges. Year-to-date in 2025, we recognized gains in Cost of products sold of $8 million ($6 million after tax, or $.02 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges;
•In the third quarter of 2026, we recognized actuarial and curtailment gains in Other expenses / (income) of $30 million ($23 million after tax, or $.08 per share). The actuarial and curtailment gains were related to interim remeasurements of certain pension plans due to plan amendments and activity under our cost savings initiatives. Year-to-date in 2025, we recognized an actuarial loss in Other expenses / (income) of $2 million ($1 million after tax) related to an interim remeasurement of our postretirement plan due to a plan amendment;
•In the second quarter of 2026, we entered into purchase agreements to acquire 49% of the issued and outstanding equity interests of La Regina. Subsequent to the end of the third quarter, the acquisition was completed on May 4, 2026. In the third quarter of 2026, we recognized costs associated with the acquisition in Other expenses / (income) of $2 million ($2 million after tax, or $.01 per share). Year-to-date in 2026, we recognized costs associated with the acquisition in Other expenses / (income) of $4 million ($4 million after tax, or $.01 per share);
•Year-to-date in 2026, we recorded litigation expenses in Administrative expenses of $11 million ($8 million after tax, or $.03 per share) related to the Plum baby food and snacks business (Plum), which was divested on May 3, 2021, and certain other litigation matters. In the third quarter of 2025, we recorded litigation expenses in Administrative expenses of $4 million ($4 million after tax, or $.01 per share) related to Plum and certain other litigation matters. Year-to-date in 2025, we recorded litigation expenses in Administrative expenses of $6 million ($6 million after tax, or $.02 per share) related to Plum and certain other litigation matters;
•Year-to-date in 2026 and 2025, we recognized insurance recoveries in Administrative expenses of $1 million ($1 million after tax) related to a cybersecurity incident that was identified in the fourth quarter of 2023;
•In the third quarter of 2025, the company performed an interim impairment assessment on the Snyder's of Hanover trademark within the Snacks segment and recognized an impairment charge of $150 million ($112 million after tax, or $.37 per share) on the trademark.
In the second quarter of 2025, we performed an interim impairment assessment on certain salty snacks and cookie trademarks within our Snacks segment, including Tom's, Jays, Kruncher's, O-Ke-Doke, Stella D'oro and Archway, collectively referred to as our "Allied brands," and recognized an impairment charge of $15 million on the trademarks.
In the second quarter of 2025, we performed an interim impairment assessment on the Late July trademark within our Snacks segment and recognized an impairment charge of $11 million on the trademark.
Year-to-date in 2025, the total aggregate impact of the impairment charges was $176 million ($131 million after tax, or $.44 per share).
The charges were included in Other expenses / (income);
•In the third quarter of 2025, we completed the sale of our noosa yoghurt business. In the second quarter of 2025, we recorded $15 million ($.05 per share) of tax expense related to the sale. Year-to-date in 2025, we recorded an after-tax loss of $15 million ($.05 per share) on the sale of the business. In the first quarter of 2025, we recorded a loss in Other expenses / (income) of $25 million ($19 million after tax, or $.06 per share) on the sale of our Pop Secret popcorn business. Year-to-date in 2025, the total aggregate impact of charges associated with divestitures was $25 million ($34 million after tax, or $.11 per share); and
•In the third quarter of 2025, we recorded accelerated amortization expense in Other expenses / (income) of $6 million ($5 million after tax, or $.02 per share) related to customer relationship intangible assets due to the loss of certain contract manufacturing customers, which began in the fourth quarter of 2023. Year-to-date in 2025, we recorded accelerated amortization expense in Other expenses / (income) of $20 million ($15 million after tax, or $.05 per share).
The items impacting comparability are summarized below:
| Three Months Ended | |||||||||||||||||||||||
| May 3, 2026 | April 27, 2025 | ||||||||||||||||||||||
| (Millions, except per share amounts) |
Earnings
Impact
|
EPS
Impact
|
Earnings
Impact
|
EPS
Impact
|
|||||||||||||||||||
| Net earnings attributable to The Campbell's Company | $ | 124 | $ | .41 | $ | 66 | $ | .22 | |||||||||||||||
| Costs associated with cost savings and optimization initiatives | $ | (52) | $ | (.17) | $ | (24) | $ | (.08) | |||||||||||||||
| Commodity mark-to-market gains (losses) | 5 | .02 | (7) | (.02) | |||||||||||||||||||
| Pension actuarial and curtailment gains | 23 | .08 | - | - | |||||||||||||||||||
| Costs associated with acquisition | (2) | (.01) | - | - | |||||||||||||||||||
| Certain litigation expenses | - | - | (4) | (.01) | |||||||||||||||||||
| Impairment charges | - | - | (112) | (.37) | |||||||||||||||||||
| Accelerated amortization | - | - | (5) | (.02) | |||||||||||||||||||
|
Impact of items on Net earnings(1)
|
$ | (26) | $ | (.09) | $ | (152) | $ | (.51) | |||||||||||||||
______________________________________
(1) Sum of the individual amounts may not add due to rounding.
| Nine Months Ended | |||||||||||||||||||||||
| May 3, 2026 | April 27, 2025 | ||||||||||||||||||||||
| (Millions, except per share amounts) |
Earnings
Impact
|
EPS
Impact
|
Earnings
Impact
|
EPS
Impact
|
|||||||||||||||||||
| Net earnings attributable to The Campbell's Company | $ | 463 | $ | 1.55 | $ | 457 | $ | 1.52 | |||||||||||||||
| Costs associated with cost savings and optimization initiatives | $ | (96) | $ | (.32) | $ | (70) | $ | (.23) | |||||||||||||||
| Commodity mark-to-market gains | 15 | .05 | 6 | .02 | |||||||||||||||||||
| Pension and postretirement actuarial and curtailment gains (losses) | 23 | .08 | (1) | - | |||||||||||||||||||
| Costs associated with acquisition | (4) | (.01) | - | - | |||||||||||||||||||
| Certain litigation expenses | (8) | (.03) | (6) | (.02) | |||||||||||||||||||
| Cybersecurity incident recoveries | 1 | - | 1 | - | |||||||||||||||||||
| Impairment charges | - | - | (131) | (.44) | |||||||||||||||||||
| Charges associated with divestitures | - | - | (34) | (.11) | |||||||||||||||||||
| Accelerated amortization | - | - | (15) | (.05) | |||||||||||||||||||
| Impact of items on Net earnings | $ | (69) | $ | (.23) | $ | (250) | $ | (.83) | |||||||||||||||
Net earnings attributable to The Campbell's Company were $124 million ($.41 per share) in the current quarter, compared to $66 million ($.22 per share) in the year-ago quarter. After adjusting for items impacting comparability, earnings decreased primarily due to lower gross profit. The estimated net impact of tariffs was approximately $.07 per share in the current quarter.
Net earnings attributable to The Campbell's Company were $463 million ($1.55 per share) in the nine-month period this year, compared to $457 million ($1.52 per share) in the year-ago period. After adjusting for items impacting comparability, earnings decreased primarily due to lower gross profit, partially offset by lower administrative expenses and lower marketing and selling expenses. The estimated net impact of tariffs was approximately $.17 per share in the current year. The negative impact from divestitures was approximately $.02 per share in the current year.
THIRD-QUARTER DISCUSSION AND ANALYSIS
Sales
An analysis of net sales by reportable segment follows:
| Three Months Ended | |||||||||||||||||
| (Millions) | May 3, 2026 | April 27, 2025 | % Change | ||||||||||||||
| Meals & Beverages | $ | 1,426 | $ | 1,493 | (4) | ||||||||||||
| Snacks | 940 | 982 | (4) | ||||||||||||||
| $ | 2,366 | $ | 2,475 | (4) | |||||||||||||
An analysis of percent change of net sales by reportable segment follows:
|
Meals & Beverages(2)
|
Snacks
|
Total(2)
|
|||||||||||||||
| Volume/mix | (5)% | (6)% | (5)% | ||||||||||||||
|
Net price realization(1)
|
1 | 2 | 1 | ||||||||||||||
| Divestitures | (1) | - | (1) | ||||||||||||||
| (4)% | (4)% | (4)% | |||||||||||||||
__________________________________________
(1)Includes revenue reductions from trade promotion and consumer coupon redemption programs.
(2)Sum of the individual amounts does not add due to rounding.
In Meals & Beverages, sales decreased 4%. Excluding the impact from the divestiture of the noosa yoghurt business, sales decreased primarily due to declines in U.S. soup, Rao's and Canada, partially offset by gains in Prego pasta sauces. Sales of Rao's decreased due primarily to the timing of shipments related to the implementation of our existing SAP enterprise-resource planning system for Sovos Brands, Inc. (Sovos Brands) in the prior year. Unfavorable volume/mix was partially offset by favorable net price realization. Sales were impacted by an approximate 1% headwind from the net impact of the Sovos Brands
SAP implementation in the prior year and the storm-related shipment delays in January this year. Sales of U.S. soup decreased 8% driven primarily by condensed and ready-to-serve soups.
In Snacks, sales decreased 4% due to declines in crackers, pretzels, third-party partner brands and contract manufacturing, chips and fresh bakery. Sales were impacted by volume/mix declines, partially offset by favorable net price realization.
Gross Profit
Gross profit, defined as Net sales less Cost of products sold, decreased by $78 million in 2026 from 2025. As a percent of sales, gross profit declined to 27.5% in 2026 from 29.4% in 2025, due in part to the negative impact of tariffs.
The 190 basis-point decrease in gross profit margin was due to the following factors:
| Margin Impact | |||||
|
Cost inflation, supply chain costs and other factors(1)
|
(530) | ||||
|
Volume/mix(2)
|
(60) | ||||
| Higher costs associated with cost savings initiatives | (20) | ||||
| Productivity improvements | 310 | ||||
| Net price realization | 110 | ||||
| (190) | |||||
__________________________________________
(1)Includes an estimated negative margin impact of 310 basis points from the gross impact of tariffs, partially offset by a positive margin impact of 70 basis points from the change in unrealized mark-to-market adjustments on outstanding undesignated commodity hedges and an estimated positive margin impact of 30 basis points from the benefit of cost savings initiatives.
(2)Includes the impact of operating leverage.
Marketing and Selling Expenses
Marketing and selling expenses as a percent of sales were 9.0% in 2026 compared to 8.7% in 2025. Marketing and selling expenses decreased 1% in 2026 from 2025. The decrease was primarily due to lower costs associated with cost savings and optimization initiatives (approximately 3 points), partially offset by higher advertising and consumer promotion expense (approximately 1 point). The increase in advertising and consumer promotion expense was primarily driven by Meals & Beverages.
Administrative Expenses
Administrative expenses as a percent of sales were 6.6% in 2026 compared to 6.5% in 2025. Administrative expenses decreased 4% in 2026 from 2025. The decrease was primarily due to increased benefits from cost savings initiatives (approximately 4 points); a reduction in certain litigation expenses (approximately 2 points) and lower incentive compensation (approximately 2 points), partially offset by higher general administrative costs (approximately 4 points).
Other Expenses / (Income)
Other expenses were $8 million in 2026 compared to $160 million in 2025. Other expenses in 2026 included costs associated with cost savings initiatives of $38 million, costs associated with an acquisition of $2 million and pension actuarial and curtailment gains of $30 million. Other expenses in 2025 included an impairment charge related to the Snyder's of Hanover trademark of $150 million and accelerated amortization expense of $6 million.
Operating Earnings
Segment operating earnings decreased 22% in 2026 from 2025.
An analysis of operating earnings by segment follows:
| Three Months Ended | ||||||||||||||||||||
| (Millions) | May 3, 2026 | April 27, 2025 | % Change | |||||||||||||||||
| Meals & Beverages | $ | 213 | $ | 253 | (16) | |||||||||||||||
| Snacks | 95 | 140 | (32) | |||||||||||||||||
| 308 | 393 | (22) | ||||||||||||||||||
| Corporate income (expense) | (60) | (226) | ||||||||||||||||||
|
Restructuring charges(1)
|
(9) | (6) | ||||||||||||||||||
| Earnings before interest and taxes | $ | 239 | $ | 161 | ||||||||||||||||
__________________________________________
(1)See Note 8 to the Consolidated Financial Statements for additional information on restructuring charges.
Operating earnings from Meals & Beverages decreased 16%. The decrease was primarily due to lower gross profit. Gross profit margin decreased primarily due to the gross impact of tariffs, cost inflation and other supply chain costs and unfavorable volume/mix, partially offset by supply chain productivity improvements, favorable net price realization and benefits from cost savings initiatives.
Operating earnings from Snacks decreased 32%. The decrease was primarily due to lower gross profit. Gross profit margin decreased primarily due to cost inflation and other supply chain costs, unfavorable volume/mix and the gross impact of tariffs, partially offset by supply chain productivity improvements, favorable net price realization and benefits from cost savings initiatives.
Corporate expense in 2026 included the following:
•costs of $60 million related to costs savings and optimization initiatives;
•$2 million of costs associated with an acquisition;
•$30 million of pension actuarial and curtailment gains; and
•$6 million of unrealized mark-to-market gains on outstanding undesignated commodity hedges.
Corporate expense in 2025 included the following:
•$150 million of an impairment charge related to the Snyder's of Hanover trademark;
•costs of $25 million related to cost savings and optimization initiatives;
•$10 million of unrealized mark-to-market losses on outstanding undesignated commodity hedges;
•$6 million of accelerated amortization expense; and
•$4 million of certain litigation expenses, including expenses related to Plum.
Interest Expense
Interest expense of $83 million in 2026 decreased from $85 million in 2025 primarily due to lower levels of debt.
Taxes on Earnings
The effective tax rate was 22.0% in 2026 and 18.5% in 2025. The increase in the effective tax rate was primarily due to timing of recognition of tax expense related to the impairment charge in the prior year.
NINE-MONTH DISCUSSION AND ANALYSIS
Sales
An analysis of net sales by reportable segment follows:
| Nine Months Ended | |||||||||||||||||
| (Millions) | May 3, 2026 | April 27, 2025 | % Change | ||||||||||||||
| Meals & Beverages | $ | 4,741 | $ | 4,943 | (4) | ||||||||||||
| Snacks | 2,866 | 2,989 | (4) | ||||||||||||||
| $ | 7,607 | $ | 7,932 | (4) | |||||||||||||
An analysis of percent change of net sales by reportable segment follows:
| Meals & Beverages |
Snacks
|
Total
|
|||||||||||||||
| Volume/mix | (3)% | (5)% | (4)% | ||||||||||||||
|
Net price realization(1)
|
1 | 1 | 1 | ||||||||||||||
| Divestitures | (2) | - | (1) | ||||||||||||||
| (4)% | (4)% | (4)% | |||||||||||||||
__________________________________________
(1)Includes revenue reductions from trade promotion and consumer coupon redemption programs.
In Meals & Beverages, sales decreased 4%. Excluding the impact from the divestiture of the noosa yoghurt business, sales decreased primarily due to declines in U.S. soup, Canada, V8 beverages and Pace Mexican sauces, partially offset by gains in Rao's. Unfavorable volume/mix was partially offset by favorable net price realization. Sales of U.S. soup decreased 4% primarily due to decreases in ready-to-serve soups and condensed soups, partially offset by increases in broth.
In Snacks, sales decreased 4%. Excluding the impact from the divestiture of the Pop Secret popcorn business, sales decreased primarily due to declines in chips, crackers, third-party partner brands and contract manufacturing, fresh bakery related to supply constraints and declines in pretzels, partially offset by gains in Pepperidge Farm cookies. Sales were impacted by volume/mix declines, partially offset by favorable net price realization.
Gross Profit
Gross profit, defined as Net sales less Cost of products sold, decreased by $255 million in 2026 from 2025. As a percent of sales, gross profit declined to 28.4% in 2026 from 30.4% in 2025, due in part to the negative impact of tariffs.
The 200 basis-point decrease in gross profit margin was due to the following factors:
| Margin Impact | |||||
|
Cost inflation, supply chain costs and other factors(1)
|
(510) | ||||
|
Volume/mix(2)
|
(60) | ||||
| Productivity improvements | 280 | ||||
| Net price realization | 90 | ||||
| (200) | |||||
__________________________________________
(1)Includes an estimated negative margin impact of 240 basis points from the gross impact of tariffs, partially offset by an estimated positive margin impact of 30 basis points from the benefit of cost savings initiatives and a positive margin impact of 20 basis points from the change in unrealized mark-to-market adjustments on outstanding undesignated commodity hedges.
(2)Includes the impact of operating leverage.
Marketing and Selling Expenses
Marketing and selling expenses as a percent of sales were 9.5% in 2026 compared to 9.1% in 2025. Marketing and selling expenses were comparable in 2026 and 2025. Lower selling expenses (approximately 1 point); increased benefits from cost savings initiatives (approximately 1 point) and lower incentive compensation (approximately 1 point) were offset by higher marketing expenses (approximately 1 point); higher costs associated with costs savings and optimization initiatives (approximately 1 point) and higher benefit-related costs (approximately 1 point).
Administrative Expenses
Administrative expenses as a percent of sales were 6.3% in 2026 and 2025. Administrative expenses decreased 4% in 2026 from 2025. The decrease was primarily due to increased benefits from cost savings initiatives (approximately 4 points); lower incentive compensation (approximately 2 points) and lower costs associated with cost savings initiatives (approximately 1 point), partially offset by higher general administrative costs and inflation (approximately 2 points) and an increase in certain litigation expenses (approximately 1 point).
Other Expenses / (Income)
Other expenses were $24 million in 2026 compared to $244 million in 2025. Other expenses in 2026 included cost associated with cost savings initiatives of $38 million, costs associated with an acquisition of $4 million and pension actuarial and curtailment gains of $30 million. Other expenses in 2025 included impairment charges related to the Snyder's of Hanover, Allied brands and Late July trademarks of $176 million, a loss of $25 million on the sale of the Pop Secret popcorn business, accelerated amortization expense of $20 million and a postretirement actuarial loss of $2 million.
Operating Earnings
Segment operating earnings decreased 18% in 2026 from 2025.
An analysis of operating earnings by segment follows:
| Nine Months Ended | ||||||||||||||||||||
| (Millions) | May 3, 2026 | April 27, 2025 | % Change | |||||||||||||||||
| Meals & Beverages | $ | 762 | $ | 892 | (15) | |||||||||||||||
| Snacks | 285 | 385 | (26) | |||||||||||||||||
| 1,047 | 1,277 | (18) | ||||||||||||||||||
| Corporate income (expense) | (184) | (405) | ||||||||||||||||||
|
Restructuring charges(1)
|
(15) | (17) | ||||||||||||||||||
| Earnings before interest and taxes | $ | 848 | $ | 855 | ||||||||||||||||
__________________________________________
(1)See Note 8 to the Consolidated Financial Statements for additional information on restructuring charges.
Operating earnings from Meals & Beverages decreased 15%. The decrease was primarily due to lower gross profit and the impact of the divestiture. Gross profit margin decreased primarily due to the gross impact of tariffs, cost inflation and other supply chain costs and unfavorable volume/mix, partially offset by supply chain productivity improvements, favorable net price realization and benefits from cost savings initiatives.
Operating earnings from Snacks decreased 26%. The decrease was primarily due to lower gross profit. Gross profit margin decreased primarily due to cost inflation and other supply chain costs, the gross impact of tariffs and unfavorable volume/mix, partially offset by supply chain productivity improvements, favorable net price realization and benefits from cost savings initiatives.
Corporate expense in 2026 included the following:
•costs of $112 million related to costs savings and optimization initiatives;
•$11 million of certain litigation expenses, including expenses related to Plum;
•$4 million of costs associated with an acquisition;
•$30 million of pension actuarial and curtailment gains;
•$20 million of unrealized mark-to-market gains on outstanding undesignated commodity hedges; and
•$1 million of insurance recoveries related to a cybersecurity incident.
Corporate expense in 2025 included the following:
•$176 million of impairment charges related to the Snyder's of Hanover, Allied brands and Late July trademarks;
•costs of $74 million related to cost savings and optimization initiatives;
•$25 million loss on the sale of the Pop Secret popcorn business;
•$20 million of accelerated amortization expense;
•$6 million of certain litigation expenses, including expenses related to Plum;
•$2 million postretirement actuarial loss;
•$8 million of unrealized mark-to-market gains on outstanding undesignated commodity hedges; and
•$1 million of insurance recoveries related to a cybersecurity incident.
Interest Expense
Interest expense of $246 million in 2026 decreased from $260 million in 2025 primarily due to lower levels of debt.
Taxes on Earnings
The effective tax rate was 23.8% in 2026 and 25.3% in 2025. The decrease in the effective tax rate was primarily due to $15 million of tax expense related to the sale of the noosa yoghurt business in the prior year, partially offset by excess tax benefits in the prior year and shortfalls in the current year associated with the vesting of stock-based compensation awards.
Restructuring Charges, Cost Savings Initiatives and Other Optimization Initiatives
2025 Cost Savings Initiatives
On September 10, 2024, we announced plans to implement cost savings initiatives beginning in 2025, including initiatives to further optimize our supply chain and manufacturing network, optimization of our information technology infrastructure and targeted cost management. We also identified additional opportunities for cost synergies as we integrated Sovos Brands. As of July 28, 2024, we substantially completed our previous multi-year cost savings initiatives and Snyder's-Lance, Inc. cost transformation program and integration and had identified initial opportunities for cost synergies as we integrated Sovos Brands. Certain initiatives from those programs have been incorporated into our 2025 cost savings initiatives. In the third quarter of 2026, we commenced a voluntary early retirement program as part of our cost savings initiatives. The program was available to certain salaried employees who met age and length-of-service criteria. The eligible employees were entitled to receive severance pay and benefits, including enhanced pension benefits for certain employees. Substantially all electing employees will depart the company by December 2026. Cost estimates for the 2025 initiatives, as well as timing for certain activities, are continuing to be developed.
A summary of the pre-tax charges recorded in the Consolidated Statements of Earnings related to these initiatives is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| (Millions, except per share amounts) | May 3, 2026 | April 27, 2025 | May 3, 2026 | April 27, 2025 |
Recognized as of May 3, 2026
|
||||||||||||||||||||||||
| Restructuring charges | $ | 9 | $ | 6 | $ | 15 | $ | 17 | $ | 39 | |||||||||||||||||||
| Administrative expenses | 6 | 7 | 21 | 26 | 62 | ||||||||||||||||||||||||
| Cost of products sold | 12 | 7 | 28 | 25 | 60 | ||||||||||||||||||||||||
| Marketing and selling expenses | 1 | - | 3 | 2 | 7 | ||||||||||||||||||||||||
| Research and development expenses | 1 | 1 | 2 | 3 | 5 | ||||||||||||||||||||||||
| Other expenses / (income) | 38 | - | 38 | - | 38 | ||||||||||||||||||||||||
| Total pre-tax charges | $ | 67 | $ | 21 | $ | 107 | $ | 73 | $ | 211 | |||||||||||||||||||
| Aggregate after-tax impact | $ | 51 | $ | 16 | $ | 81 | $ | 56 | |||||||||||||||||||||
| Per share impact | $ | .17 | $ | .05 | $ | .27 | $ | .19 | |||||||||||||||||||||
A summary of the cumulative pre-tax costs associated with the initiatives is as follows:
| (Millions) |
Recognized as of May 3, 2026
|
||||
|
Severance pay and benefits
|
$ | 76 | |||
| Asset impairment/accelerated depreciation | 52 | ||||
|
Implementation costs and other related costs
|
83 | ||||
| Total | $ | 211 | |||
The total estimated pre-tax costs for actions that have been identified to date are approximately $310 million, and we expect to incur substantially all of the costs through 2028. These estimates will be updated as the detailed plans are developed.
We expect the costs for the actions that have been identified to date to consist of the following: approximately $90 million in severance pay and benefits; approximately $55 million in asset impairment and accelerated depreciation; and approximately $165 million in implementation costs and other related costs. We expect these pre-tax costs to be associated with our segments as follows: Meals & Beverages - approximately 54%; Snacks - approximately 26% and Corporate - approximately 20%.
Of the aggregate $310 million of pre-tax costs identified to date, we expect approximately $215 million will be cash expenditures. In addition, we expect to invest approximately $220 million in capital expenditures, of which we invested $208 million as of May 3, 2026. The capital expenditures primarily relate to optimization of production within our manufacturing network, optimization of information technology infrastructure and applications and implementation of our existing SAP enterprise-resource planning system for Sovos Brands.
We expect the initiatives, once all phases are implemented, to generate annual ongoing savings of approximately $375 million by the end of 2028. As of May 3, 2026, we have generated total program-to-date pre-tax savings of $200 million.
Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges. A summary of the pre-tax costs associated with segments is as follows:
| May 3, 2026 | |||||||||||||||||
| (Millions) | Three Months Ended | Nine Months Ended |
Costs Incurred to Date
|
||||||||||||||
| Meals & Beverages | $ | 31 | $ | 51 | $ | 125 | |||||||||||
| Snacks | 25 | 38 | 52 | ||||||||||||||
| Corporate | 11 | 18 | 34 | ||||||||||||||
| Total | $ | 67 | $ | 107 | $ | 211 | |||||||||||
Other Optimization Initiatives
In the second quarter of 2024, we began implementation of an initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network. Pursuant to this initiative we will purchase certain Pepperidge Farm and Snyder's-Lance routes where there are opportunities to unlock greater scale in select markets, combine them and sell the combined routes to independent contractor distributors. We expect to execute this program in a staggered rollout and to incur expenses of up to approximately $115 million through 2029. In the three- and nine-month periods ended May 3, 2026, we incurred $2 million and
$20 million in Marketing and selling expenses related to this initiative, respectively. In the three- and nine-month periods ended April 27, 2025, we incurred $9 million and $17 million in Marketing and selling expenses and $1 million in Administrative expenses related to this initiative, respectively. As of May 3, 2026, we have incurred $45 million in Marketing and selling expenses and $1 million in Administrative expenses related to this initiative.
Potential Future Initiatives
We continue to explore additional opportunities for cost savings designed to enhance operating efficiency, which may result in additional restructuring actions in the future.
LIQUIDITY AND CAPITAL RESOURCES
We expect foreseeable liquidity and capital resource requirements to be met through anticipated cash flows from operations; long-term borrowings; short-term borrowings, which may include commercial paper; credit facilities; and cash and cash equivalents. We believe that our sources of financing will be adequate to meet our future requirements.
Operating Activities
We generated cash flows from operations of $839 million in 2026, compared to $872 million in 2025. The decline in 2026 was primarily due to lower cash earnings, partially offset by changes in working capital.
We had negative working capital of $395 million as of May 3, 2026, and $674 million as of August 3, 2025. Current assets were less than current liabilities, which included debt maturing in one year, due to a focus on lowering core working capital requirements. Total debt maturing within one year was $864 million as of May 3, 2026, and $762 million as of August 3, 2025.
As part of our focus to lower core working capital requirements, we have worked with our suppliers to optimize our terms and conditions, including the extension of payment terms. Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from 0 to 120 days. We also maintain agreements with third-party administrators that allow participating suppliers to track payment obligations from us, and, at the sole discretion of the supplier, sell those payment obligations to participating financial institutions. Our obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted. Supplier participation in these agreements is voluntary. We have no economic interest in a supplier's decision to enter into these agreements and no direct financial relationship with the financial institutions regarding these transactions. We have not pledged assets as security or provided any guarantees in connection with these arrangements. The payment of these obligations is included in cash provided by operating activities in the Consolidated Statements of Cash Flows. Our outstanding obligations confirmed as valid under these programs, which are included in Accounts payable on the Consolidated Balance Sheets, were approximately $253 million at May 3, 2026 and $240 million at August 3, 2025.
Investing Activities
Capital expenditures were $297 million in 2026 and $296 million in 2025. Capital expenditures in 2026 included network optimization for our Meals & Beverages business, information technology projects and wastewater initiatives. Capital expenditures are expected to total approximately $370 million in 2026.
In Snacks, we have a direct-store-delivery distribution model that uses independent contractor distributors. From time to time, we purchase and sell routes, including certain routes under our optimization initiatives. The purchase and sale proceeds of the routes are reflected in investing activities.
On August 26, 2024, we sold our Pop Secret popcorn business for $70 million. On February 24, 2025, we sold the noosa yoghurt business for $188 million, subject to certain customary purchase price adjustments, which resulted in $5 million of additional proceeds in the first quarter of 2026.
Financing Activities
Dividend payments were $354 million in 2026 and $343 million in 2025. The regular quarterly dividend paid on our capital stock was $.39 per share in both the third quarter of 2026 and 2025. On February 25, 2026, the Board of Directors declared a regular quarterly dividend of $.39 per share payable on May 4, 2026 to shareholders of record at the close of business on April 2, 2026. On May 13, 2026, the Board of Directors declared a regular quarterly dividend of $.39 per share payable on August 3, 2026 to shareholders of record at the close of business on July 2, 2026.
In September 2021, the Board approved a strategic share repurchase program of up to $500 million (September 2021 program). The September 2021 program has no expiration date, but it may be suspended or discontinued at any time. Repurchases under the September 2021 program may be made in open-market or privately negotiated transactions. In September 2024, the Board authorized an anti-dilutive share repurchase program of up to $250 million (September 2024 program) to offset the impact of dilution from shares issued under our stock compensation programs. The September 2024 program has no expiration date, but it may be suspended or discontinued at any time. Repurchases under the September 2024 program may be made in open-market or privately negotiated transactions. The September 2024 program replaced an anti-dilutive share repurchase program of up to $250 million that was approved by the Board in June 2021 and has been terminated. During the nine-month periods ended May 3, 2026 and April 27, 2025, we repurchased 805 thousand shares at a cost of
$26 million and 1.247 million shares at a cost of $60 million, respectively, pursuant to our anti-dilutive share repurchase programs. As of May 3, 2026, approximately $172 million remained available under the September 2024 program and approximately $301 million remained available under the September 2021 program. See Note 15 to the Consolidated Financial Statements and "Unregistered Sales of Equity Securities and Use of Proceeds" for additional information.
In August 2023, we filed a registration statement with the Securities and Exchange Commission that registered an indeterminate amount of debt securities. Under the registration statement we may issue debt securities from time to time, depending on market conditions.
On October 2, 2024, pursuant to the registration statement, we completed the issuance of senior unsecured notes of $1.15 billion, consisting of:
•$800 million aggregate principal amount of notes bearing interest at a fixed rate of 4.75% per annum, due March 23, 2035, with interest payable semi-annually on each of March 23 and September 23 commencing March 23, 2025; and
•$350 million aggregate principal amount of notes bearing interest at a fixed rate of 5.25% per annum, due October 13, 2054, with interest payable semi-annually on each of April 13 and October 13 commencing April 13, 2025.
The notes contain customary covenants and events of default. If a change of control triggering event occurs, we will be required to offer to purchase the notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the purchase date. In October 2024, we used a portion of the net proceeds from the issuance of the notes to repay $200 million of the $400 million outstanding under our 2022 Delayed Draw Term Loan Credit Agreement (the 2022 DDTL Credit Agreement) due November 15, 2025 and a portion of our outstanding commercial paper. In November 2024, we repaid the remaining $200 million outstanding under the 2022 DDTL Credit Agreement. In March 2025, we used a portion of the net proceeds from the issuance of the notes along with cash on hand and the issuance of commercial paper to repay a $1.15 billion aggregate principal amount of senior notes that matured in March 2025.
On December 15, 2025, pursuant to the registration statement, we completed the issuance of senior unsecured notes, consisting of $550 million aggregate principal amount of notes bearing interest at a fixed rate of 4.55% per annum, due March 21, 2031, with interest payable semi-annually on each of March 21 and September 21 commencing March 21, 2026. The notes contain customary covenants and events of default. If a change of control triggering event occurs, we will be required to offer to purchase the notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the purchase date. We used a portion of the net proceeds from the issuance of the notes to repay a portion of our outstanding commercial paper and used the remaining proceeds to repay existing indebtedness and for general corporate purposes. In March 2026, we used a portion of the net proceeds from the issuance of the notes along with cash on hand and the issuance of commercial paper to repay $400 million aggregate principal amount of senior notes that matured in March 2026.
As of May 3, 2026, we had $864 million of short-term borrowings due within one year, of which $340 million was comprised of commercial paper borrowings. As of May 3, 2026, we issued $45 million of standby letters of credit.
On April 16, 2024, we entered into a Five-Year Credit Agreement for an unsecured, senior revolving credit facility (the 2024 Revolving Credit Facility Agreement) in an aggregate principal amount equal to $1.85 billion with a maturity date of April 16, 2029 or such later date as extended pursuant to the terms set forth in the 2024 Revolving Credit Facility Agreement. On August 5, 2025, we entered into an Extension Agreement to extend the maturity date of the 2024 Revolving Credit Facility Agreement by one year from April 16, 2029 to April 16, 2030. The 2024 Revolving Credit Facility Agreement remained unused at May 3, 2026, except for $1 million of standby letters of credit that we issued under it. We may increase the 2024 Revolving Credit Facility Agreement commitments up to an additional $500 million, subject to the satisfaction of certain conditions. Loans under the 2024 Revolving Credit Facility Agreement will bear interest at the rates specified in the 2024 Revolving Credit Facility Agreement, which vary based on the type of loan and certain other conditions. The 2024 Revolving Credit Facility Agreement contains customary covenants, including a financial covenant with respect to a minimum consolidated interest coverage ratio of consolidated adjusted EBITDA to consolidated interest expense of not less than 3.25:1.00, and customary events of default for credit facilities of this type. The facility supports our commercial paper program and other general corporate purposes. We expect to continue to access the commercial paper markets, bank credit lines and utilize cash flows from operations to support our short-term liquidity requirements.
We are in compliance with the covenants contained in our credit facilities and debt securities. Our credit ratings remain at investment grade. A downgrade in one or more of our credit ratings could impact our ability to issue unsecured debt securities and potentially increase borrowing costs under our 2024 Revolving Credit Facility Agreement but would not affect our ability to borrow under such credit facility. A downgrade in one or more of our credit ratings would also impact our ability to access the commercial paper markets.
CRITICAL ACCOUNTING ESTIMATES
We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. Our significant accounting policies are described in Note 1 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended August 3, 2025 (2025 Annual Report on Form 10-K). The accounting policies we used in preparing these financial statements are substantially consistent with those we applied in our 2025 Annual Report on Form 10-K. Our critical accounting estimates are described in Management's Discussion and Analysis included in the 2025 Annual Report on Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 to the Consolidated Financial Statements for information on recent accounting pronouncements.
FORWARD-LOOKING STATEMENTS
This Report contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations regarding our future results of operations, economic performance, financial condition and achievements. These forward-looking statements can be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "pursue," "strategy," "target," "will" and similar expressions. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts, and may reflect anticipated cost savings or implementation of our strategic plan. These statements reflect our current plans and expectations and are based on information currently available to us. They rely on several assumptions regarding future events and estimates which could be inaccurate and which are inherently subject to risks and uncertainties.
We wish to caution the reader that the following important factors and those important factors described in our other Securities and Exchange Commission filings, or in our 2025 Annual Report on Form 10-K, could affect our actual results and could cause such results to vary materially from those expressed in any forward-looking statements made by, or on behalf of, us:
•declines or volatility in financial markets, deteriorating economic conditions and other external factors, including the impact and application of new or changes to existing governmental laws, regulations, and policies;
•the risks associated with imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners;
•the risks related to the availability of, and cost inflation in, supply chain inputs, including labor, raw materials, commodities, packaging and transportation, including those related to ongoing geopolitical conflicts and tariffs;
•disruptions in or inefficiencies to our supply chain and/or operations, including reliance on key contract manufacturer and supplier relationships;
•our ability to execute on and realize the expected benefits from our strategy, including sales growth in and/or maintenance of our market share position in snacks, soups, sauces and beverages;
•the impact of strong competitive responses to our efforts to leverage brand power with product innovation, promotional programs and new advertising;
•the risks associated with trade and consumer acceptance of product improvements, shelving initiatives, new products and pricing and promotional strategies;
•changes in consumer demand for our products and favorable perception of our brands;
•the risk that the cost savings and any other synergies from the Sovos Brands transaction may not be fully realized or may take longer or cost more to be realized than expected, including that the Sovos Brands transaction may not be accretive to the extent anticipated;
•the risks related to the La Regina transaction, including that the benefits from the transaction may not be fully realized or may take longer or cost more to be realized than expected;
•our ability to realize projected cost savings and benefits from cost savings initiatives and the integration of recent acquisitions;
•risks related to the effectiveness of our hedging activities and our ability to respond to volatility in commodity prices;
•our ability to manage changes to our organizational structure and/or business processes, including selling, distribution, manufacturing and information management systems or processes;
•changing inventory management practices by certain of our key customers;
•a changing customer landscape, with value and e-commerce retailers expanding their market presence, while certain of our key customers maintain significance to our business;
•product quality and safety issues, including recalls and product liabilities;
•the possible disruption to the independent contractor distribution models used by certain of our businesses, including as a result of litigation or regulatory actions affecting their independent contractor classification;
•the uncertainties of litigation and regulatory actions against us;
•a disruption, failure or security breach of our or our vendors' information technology systems, including ransomware attacks;
•our indebtedness and ability to pay such indebtedness;
•a change in outlook or downgrade in our public credit ratings;
•impairment to goodwill or other intangible assets;
•our ability to protect our intellectual property rights;
•our ability to attract and retain key talent;
•goals and initiatives related to, and the impacts of, climate change, including from weather-related events;
•the costs, disruption and diversion of management's attention associated with activist investors;
•increased liabilities and costs related to our defined benefit pension plans; and
•unforeseen business disruptions or other impacts due to political instability, civil disobedience, terrorism, geopolitical conflicts, extreme weather conditions, natural disasters, pandemics or other outbreaks of disease or other calamities.
This discussion of uncertainties is by no means exhaustive but is designed to highlight important factors that may impact our outlook. We disclaim any obligation or intent to update forward-looking statements made by us in order to reflect new information, events or circumstances after the date they are made.
The Campbell's Company published this content on June 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on June 08, 2026 at 11:27 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]