Campbell’s rises on solid Q4 results, but warns tariffs will weigh on full-year results
The soup maker posted a better-than-expected sales outlook, but warned that higher costs could squeeze margins next year.
Campbell’s stock climbed over 5% Wednesday afternoon after the soup maker dished out solid Q4 results, even as it faces higher costs.
For the 14 weeks ended August 3, Campbell’s posted adjusted earnings per share of $0.62, beating the $0.56 forecast from analysts polled by FactSet. Revenue came in at $2.32 billion, just slightly under the Street’s expectations of $2.33 billion. Campbell’s has seen an uptick in demand as more cash-strapped consumers cook at home, seeking healthy and budget-friendly options.
The company also indicated momentum from Rao’s, which is on track to become Campbell’s fourth billion-dollar brand, joining its namesake soup line, Goldfish, and Pepperidge Farm.
Looking ahead: Campbell’s expects adjusted EPS of $2.40 to $2.55, coming in shy of the Street’s $2.58 estimate and below results for its fiscal year, which recently ended. On the bright side, the company forecast sales to be flat to down 2% in its current fiscal year, which started August 4, a better showing than Wall Street’s forecast for a 2.6% drop.
Management said about two-thirds of the EPS decline in its current fiscal year will come from tariffs. Profit margins already showed some strain in its fiscal Q4, pressured by higher input costs and moderate tariff impacts, partially offset by supply chain efficiencies and cost savings.
Despite today’s pop, Campbell’s shares are down about 21% year to date.
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