Executive Summary

Q3 FY2025 was solid operationally with a clean beat vs consensus: adjusted EPS $0.73 vs $0.66* and revenue $2.48B vs $2.43B*; GAAP EPS of $0.22 was depressed by a $150M Snyder’s of Hanover trademark impairment . Results exceeded internal expectations, aided by favorable shipment timing in Meals & Beverages (M&B) .
M&B outperformed on volume/mix (+7% org vol/mix; org sales +6%), while Snacks remained soft (-5% organic, -8% reported), reflecting competitive intensity and more intentional consumer spending in discretionary snacking categories .
FY2025 guidance reaffirmed; management now expects adjusted EPS and adjusted EBIT at the low end of prior ranges; potential tariff headwind of $0.03–$0.05 per share is excluded from guidance (current 53rd-week benefit ≈ 2 pts to reported sales/EBIT and ≈ $0.05 EPS) .
Stock-relevant narrative: beat/raise on execution but mixed Snacks trajectory, tariff overhang, and interest expense headwinds; management elevated growth capabilities (new Growth Office, new Chief Digital & Technology Officer) and raised FY25 cost-savings target on the call to $130M (from $120M) to support margins and reinvestment .

What Went Well and What Went Wrong

What Went Well
- Meals & Beverages strength: Organic sales +6% on +7% volume/mix (soup, broth, Rao’s) with favorable shipment timing; M&B operating earnings +8% . CEO: “We delivered solid third quarter results that exceeded our expectations partially due to favorable shipment timing… Consumers are cooking at home at the highest levels since early 2020” .
- Cost discipline and savings: Adjusted EBIT +2% to $362M despite pricing headwinds; company delivered ~$110M toward its $250M savings program YTD .
- Sovos/Rao’s accretive: Acquisition boosted sales and EPS; Rao’s remains a growth lever, with call commentary pointing to high single-digit FY growth target for Rao’s and improving recent consumption trends .
What Went Wrong
- Snacks softness: Reported -8% (organic -5%), declines in Goldfish, Snyder’s of Hanover pretzels, Late July, Lance; operating earnings -13% .
- Margin pressure: GAAP gross margin fell 150 bps to 29.4%; adjusted gross margin -110 bps to 30.1% on cost inflation/other supply chain costs and lower net price realization, partly offset by productivity .
- Non-GAAP adjustments/interest headwind: $150M Snyder’s trademark impairment drove GAAP EPS to $0.22; higher net interest expense ($80M vs $66M) pressured adjusted EPS (-3% y/y) .

Financial Results

Consolidated trend (oldest → newest)

Metric	Q1 FY2025	Q2 FY2025	Q3 FY2025
Revenue ($USD Billions)	$2.77	$2.69	$2.48
GAAP EPS ($)	$0.72	$0.58	$0.22
Adjusted EPS ($)	$0.89	$0.74	$0.73
Adjusted EBIT ($USD Millions)	$432	$372	$362
Gross Margin (GAAP)	31.3%	30.5%	29.4%
Gross Margin (Adjusted)	31.4%	30.4%	30.1%

Q3 vs prior year and key KPIs

Metric	Q3 FY2025	Q3 FY2024
Revenue ($USD Billions)	$2.48	$2.37
GAAP EPS ($)	$0.22	$0.44
Adjusted EPS ($)	$0.73	$0.75
Adjusted EBIT ($USD Millions)	$362	$354
Gross Margin (GAAP)	29.4%	30.9%
Gross Margin (Adjusted)	30.1%	31.2%
Organic Net Sales Growth	+1%	—
Volume/Mix (org)	+2%	—
Net Price Realization (org)	-1%	—
Cash from Ops YTD ($USD Millions)	$872	$897

Q3 segment breakdown

Segment	Net Sales ($USD Millions)	y/y %	Operating Earnings ($USD Millions)	y/y %
Meals & Beverages	$1,463	+15%	$248	+8%
Snacks	$1,012	-8%	$145	-13%

Non-GAAP adjustments (Q3)

Item	EPS Impact
Snyder’s of Hanover trademark impairment	$0.37
Cost savings & optimization initiatives	$0.08
Commodity mark-to-market losses	$0.02
Accelerated amortization	$0.02
Certain litigation expenses	$0.01

Guidance Changes

Metric	Period	Previous Guidance (Mar 5, 2025)	Current (Jun 2, 2025)	Change
Net Sales Growth	FY2025	+6% to +8%	Reaffirmed +6% to +8%	Maintained
Organic Net Sales	FY2025	-2% to 0%	Reaffirmed -2% to 0%	Maintained
Adjusted EBIT Growth	FY2025	+3% to +5%	Reaffirmed; now expected at low end	Lower end emphasis
Adjusted EPS ($)	FY2025	$2.95–$3.05	Reaffirmed; now expected at low end	Lower end emphasis
Tariff Impact	FY2025	Excluded (not quantified)	Potential -$0.03 to -$0.05; excluded	New quantified risk
53rd Week Benefit	FY2025	≈ +2 pts sales/EBIT; ≈ $0.07 EPS	≈ +2 pts sales/EBIT; ≈ $0.05 EPS	EPS benefit lowered
Cost Savings	FY2025	$120M	Raised to $130M (call)	Raised
Net Interest Expense	FY2025	$325–$330M	Not updated in 8-K; reaffirm range implied	Maintained
Dividend	Ongoing	$0.39/qtr (raised in Q1)	$0.39/qtr declared May 13, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Meals-at-home surge	Q1: Soup declined on timing; portfolio well-positioned; productivity offsets cost . Q2: M&B organic -1% with declines in U.S. soup; productivity/cost savings continued .	CEO: “Consumers are cooking at home at the highest levels since early 2020,” driving M&B outperformance; M&B organic +6% on +7% volume/mix .	Positive for M&B; sustained volumes.
Snacks softness	Q1: Snacks organic -2% (Goldfish, PF cookies, Late July) . Q2: Snacks organic -3% (Goldfish, partners, Snyder’s), operating earnings -29% .	Snacks organic -5%; category weakness and competitive intensity; sequential margin improved 300 bps vs Q2; full-year Snacks margin ~13% .	Stabilizing margins, sales recovery pushed into FY2026.
Tariffs/macro	Guidance excluded tariffs; no quantification .	Estimated -$0.03–$0.05 EPS headwind if tariffs persist; mitigation via inventory, sourcing, pricing where necessary .	New headwind, managed.
Rao’s/Sovos integration	Rao’s accretive; Sovos drove topline; ERP transition planned . Q2: Sovos mid-Q3 moves into organic; acquisition accretive .	ERP integration complete; unlocks back-office savings into FY2026; Rao’s tracking high-single-digit FY growth .	Synergy capture accelerating.
Supply chain/productivity	Productivity offsets inflation across Q1–Q2 .	Adjusted GM -110 bps but mitigated by productivity and savings; ~$110M savings delivered YTD .	Ongoing offset to inflation.
Digital/technology	—	Named Chief Digital & Technology Officer to accelerate analytics and digital capabilities .	Capability uplift.
Organizational changes	—	Named Chief Growth Officer; new Snacks President to elevate growth and execution .	Growth focus intensified.
Legal/regulatory	Plum litigation costs in prior periods .	~$4M litigation expense in Q3 among adjustments .	Contained.

Management Commentary

CEO (prepared remarks): “We delivered solid third quarter results that exceeded our expectations partially due to favorable shipment timing… Consumers are cooking at home at the highest levels since early 2020 and turning to our brands for value, quality, and convenience.”
CEO (Snacks): “We’re benefiting from some strong innovation launches, [but] we are adjusting our plans to make sure we’re competitive across our full brand portfolio.”
CFO (savings and ERP): “We have now transitioned the Sovos business into our Campbell’s ERP system, which will unlock additional back-office savings… into fiscal 2026.”
CFO (tariffs): “We have estimated the net incremental headwind of tariff-related costs to be up to 3–5 cents per share… not factored into our fiscal 2025 guidance… we’re taking steps to minimize the overall impact.”

Q&A Highlights

Snacks outlook and playbook: Category deterioration explained ~2/3 of Snacks consumption decline; Campbell’s to focus on innovation, price-pack architecture, targeted promotions (e.g., Goldfish grab bags, multi-packs), and distribution to avoid a “race to the bottom” in pricing .
FY2026 setup: Snacks recovery pushed into FY2026; likely higher marketing within 9–10% range to support brands; incentive comp a modest headwind .
M&B sustainability: Management sees durable at-home cooking trend and balanced mainstream/premium portfolio (e.g., Swanson/Pacific; Prego/Rao’s) supporting continued demand; notes Q3 shipment timing benefit will reverse in Q4 .
Tariffs cadence: Impact spans Canada Wave 1 retaliatory tariffs (March), Section 232 (tin plate/aluminum), and reciprocal actions affecting Rao’s (Italy); Q4 phasing with mitigation via inventory, supplier partnerships, cost optimization .
Rao’s cadence: FY2025 outlook now high single-digit growth (vs earlier “slightly above 10%” implication); recent L4-week trends improving .

Estimates Context

Q3 FY2025 actuals vs S&P Global consensus

Metric	Consensus	Actual	Surprise
Revenue ($USD Billions)	$2.43*	$2.48	+$0.05B (beat)
Adjusted EPS ($)	$0.66*	$0.73	+$0.07 (beat)

Coverage depth: EPS (18 ests), Revenue (14 ests). Values retrieved from S&P Global.*

Implication: Street likely raises M&B run-rate and savings assumptions; Snacks 2H trajectory likely revised lower/slower given management’s “low end” guide and pushout of Snacks recovery to FY2026 .

Key Takeaways for Investors

Beat/raise quarter: Clear revenue and EPS beats vs consensus driven by M&B volume/mix and shipment timing; GAAP EPS impacted by non-cash Snyder’s impairment .
Guidance intact but at low end: FY25 reaffirmed; management dialed expectations lower within the range for adjusted EBIT/EPS as Snacks recovery slips; tariff headwind quantified but excluded from guide .
Cost levers offsetting inflation: Savings tracking ahead; ERP integration and a raised FY25 savings target ($130M) support reinvestment and margin stabilization into FY2026 .
Snacks is the swing factor: Margin improving sequentially (+300 bps q/q) but volumes pressured; execution focus on innovation, price-pack architecture, and seasonally critical back-to-school/summer periods .
Rao’s remains strategic growth engine: Brand strength intact; distribution, marketing, and innovation to sustain growth; watch tariff mitigation and supply chain actions around Italy sourcing .
Capital returns continue: $0.39 quarterly dividend maintained (declared May 13) with ongoing buybacks; deleveraging underway (net debt/adj EBITDA 3.6x at Q3) .
Near-term trading setup: Bull case anchored on sustained M&B strength and savings momentum; bear case on Snacks volume/competitive pressure and tariff/interest expense headwinds.

Additional Details and Cross-References

Consolidated P&L, segments, cash flow and balance sheet (Q3): earnings, interest, tax rates, segment operating earnings and YTD cash from ops provided in the 8‑K and press release .
Organic reconciliation and adjustments: Detailed bridges for organic sales and adjusted metrics in exhibits .
Prior two quarters for trend (Q1 and Q2): Full 8‑Ks with exhibits and guidance update (Mar 5) .
Organizational updates enhancing execution: New Chief Digital & Technology Officer and Chief Growth Officer; new Snacks President .

Sourcing: All figures, commentary, and quotes are sourced from the company’s Q3 FY2025 8‑K and press release, Q3 earnings call transcript, and related press releases, with citations as noted.

CAMPBELL'S Co (CPB)·Q3 2025 Earnings Summary