The Campbell’s Company Q4 Fiscal 2026 Earnings: Fiscal 2027 Starts With a Weak First Quarter as Snacks Turnaround Takes Time

Campbell’s exited fiscal 2026 with stronger trends in cooking-oriented Meals & Beverages products, but management’s fiscal 2027 outlook points to another difficult year for the Snacks business. The company expects organic net sales to decline about 3% at the midpoint of its outlook, with first-quarter margins and earnings under particular pressure from inflation, trade spending and weak snack volumes.

The central investment issue is whether Campbell’s can stabilize Snacks quickly enough to offset cost inflation and restore profitability. Management expects improvement as the year progresses, but does not anticipate Snacks consumption turning positive by year-end.

As Reported on the Call

The Bigger Story

The fiscal 2027 plan is structured around a recovery that is expected to arrive gradually rather than immediately. Management said the first quarter will be the low point for Snacks, reflecting weak consumption trends, unfavorable shipment comparisons tied to prior-year holiday programming, additional trade investment, inflation and fixed-cost deleveraging.

Campbell’s expects profitability to improve sequentially after the first quarter. Meals & Beverages should drive most of the initial margin recovery in the second quarter, while Snacks margin improvement is expected to be more heavily weighted toward the second half.

That phasing matters. The company is asking investors to look past what management described as a “very, very challenging” first quarter and focus on pricing realization, cost savings and innovation later in the year. But the recovery depends on execution in a segment where management still expects consumption to remain negative at fiscal year-end.

Revenue and Operating Performance

Management expects Meals & Beverages organic sales to be down slightly in fiscal 2027, broadly consistent throughout the year. The more significant pressure is in Snacks, where the company expects first-quarter organic sales to decline by a high-single-digit percentage before trends improve in later quarters.

The Q4 discussion suggested that Campbell’s food portfolio is increasingly bifurcated. Cooking-related products are performing better than ready-to-serve eating soups. Management said cooking products, including broth and condensed cooking soup, continue to work well. The company also said that more than half of its Meals & Beverages retail sales are exposed to cooking occasions, a part of the portfolio that has grown at roughly a 5% compound annual rate over the past four years, according to management.

Campbell’s is positioning this exposure around “semi-scratch” cooking: meals prepared with fewer than five ingredients and in less than 30 minutes. Rao’s remains a key brand within that strategy, alongside broth, condensed soup and condensed sauces.

Ready-to-serve soup remains less settled. Management cited encouraging early results from Campbell’s Nourish and protein soup innovation, while Pacific continued to grow at a double-digit rate. However, the company acknowledged that its mainstream ready-to-serve portfolio, particularly Chunky, still needs work.

The Snacks turnaround is less advanced. Goldfish showed encouraging Q4 trends, according to management, and the company plans to introduce better-for-you products, including gluten-free Goldfish. Pepperidge Farm Fresh Bakery also improved sequentially in Q4 versus Q3, though management said execution still requires attention.

Other areas remain uneven. Campbell’s said unflavored pretzels improved with America 250-related activation, while flavored pretzels need further work. Cookies were flat for the full year, helped by innovation including Milano White Chocolate and Chessmen. Chips appear to be the longest-duration turnaround effort, with management acknowledging that competitive actions in that category will take time to reach the market.

Profitability and Margins

Management expects fiscal 2027 gross margin to decline by 50 to 100 basis points for the full year. The first quarter will carry the greatest pressure, with gross margin expected to decline “significantly” before improving in the second quarter and turning positive in the second half.

Several factors are driving that profile. Campbell’s expects inflation of roughly 5% to 6% across the year, with logistics costs rising at a double-digit rate. While logistics inflation should ease late in the year as Campbell’s laps prior cost increases, it will remain a meaningful near-term headwind.

The company also expects negative price realization in the first quarter. Campbell’s plans heavier Meals & Beverages spending on innovation launches, slotting fees, activation and holiday displays. These investments are intended to support consumption and distribution, but they will weigh on first-quarter margins.

Management expects price realization to turn positive beginning in fiscal Q2 as recently announced price increases enter the profit-and-loss statement. The company has raised list prices by an average of 4% to 5% across roughly 60% of its portfolio. Management said its planning assumes elasticity of about 1.5 times, meaning the price increase is expected to reduce volumes enough that the action will be a headwind to net sales, even as it supports profit.

The company’s EPS outlook of $1.65 to $1.80 similarly assumes a sharp first-quarter decline followed by sequential improvement. Management expects EPS to turn positive year over year by the fourth quarter.

Demand, Customers and Pricing

Campbell’s commentary indicates that demand conditions differ materially across its portfolio. Cooking products and premium soup are showing healthier consumer traction, while Snacks consumption remains below the company’s expectations.

Management does not expect Snacks consumption to become positive during fiscal 2027, although it expects modest sequential improvement. This is a critical distinction: the company’s projected later-year recovery depends partly on pricing and cost actions, not on a return to underlying volume growth.

Retailer discussions around pricing were described as “constructive,” but the company did not provide details on acceptance rates, timing by category or potential distribution changes. Campbell’s said it designed the increases using revenue-growth-management analysis and took a selective rather than portfolio-wide approach.

Management also emphasized that it is reallocating, rather than simply reducing, trade spending. The stated objective is to deploy promotions and price points more effectively by brand and occasion. That could improve returns on trade investment, but the benefit remains an execution objective rather than a reported result.

What is Campbell's guidance and outlook?

At the midpoint, Campbell’s expects fiscal 2027 organic net sales to decline about 3% and adjusted EPS to range from $1.65 to $1.80.

The main variables determining where results fall within that range are inflation in the second half and the pace of the Snacks recovery. Campbell’s said it is roughly 80% covered on inflation in the first half but only about 50% covered in the second half. Higher-than-assumed input costs could pressure earnings, while faster Snacks volume stabilization would support both sales and profit.

The company expects cost savings to build through the year, particularly in the second half. Its $500M four-year savings program includes $150M remaining from the prior PEAK program and $350M of newly identified savings through fiscal 2030. Management identified headcount reductions, direct and indirect procurement savings, supply-chain productivity and network optimization as major sources.

Some savings should emerge relatively quickly from procurement and workforce actions. More substantial supply-chain network changes will take longer, according to management. Campbell’s recently closed two chip plants, but said additional work remains to improve plant efficiency and optimize the network.

Balance Sheet, Cash Flow and Capital

Capital allocation has become more important after Campbell’s reduced its dividend, which management characterized as a difficult but necessary decision to support long-term shareholder value. The company did not disclose the size of the dividend reduction during the call.

Campbell’s also faces a $500M bond maturity in March. Management is evaluating refinancing options and said a hybrid security remains under consideration. Such an instrument could receive 50% equity credit, though it would likely carry a higher coupon.

Management expects interest expense to rise by about $25M year over year. The increase reflects both the La Regina transaction and expected refinancing costs. Campbell’s acquired a 49% interest in La Regina, but fully consolidates the business, with the 51% it does not own recorded as noncontrolling interest. The company made an initial cash payment of about $140M and financed it with debt.

What Investors Should Watch

1. Snacks consumption trends

Campbell’s expects improvement but not positive consumption in fiscal 2027. Goldfish stabilization, Fresh Bakery execution and the pace of recovery in chips will indicate whether the turnaround is gaining traction or merely being deferred.

2. First-quarter margin pressure and second-quarter recovery

Management has clearly signaled a weak fiscal Q1. Investors should watch whether price realization begins to offset inflation in Q2 and whether Meals & Beverages delivers the initial margin recovery management expects.

3. Price elasticity and retailer execution

The company expects its 4% to 5% price increases to create a volume headwind. Actual elasticities, retailer implementation and any distribution effects will determine whether pricing supports profit without producing a deeper sales decline.

4. Delivery of the $500M savings program

Procurement savings, headcount actions and plant productivity are central to the earnings recovery. Investors should look for tangible savings conversion, particularly in the second half, rather than treating the multiyear target as near-term profit.

5. Refinancing and capital allocation

The March maturity, higher interest expense and possible hybrid issuance make financing decisions relevant to earnings and shareholder returns. The dividend reset increases the importance of whether Campbell’s can use retained cash and refinancing flexibility to improve its capital structure.

AlgovestIQ Takeaway

Campbell’s enters fiscal 2027 with a clearer operational plan but a difficult starting point. Cooking-oriented Meals & Beverages brands appear to have stronger underlying demand, and the company is investing behind categories such as broth, condensed cooking, Rao’s and premium soup. That provides a more constructive operating foundation than the headline outlook alone suggests.

However, Snacks remains the central problem. Management expects a high-single-digit sales decline in the first quarter, continued negative consumption through the year and only a back-half improvement in segment margins. Goldfish and selected Pepperidge Farm businesses are showing progress, but chips and parts of the salty-snacks portfolio appear to require a longer repair cycle.

The new cost program and targeted pricing actions can protect profitability, but neither substitutes for sustained volume recovery. Campbell’s is also managing higher interest expense, a near-term debt maturity and the financial implications of the La Regina investment, making execution against its savings plan especially important.

The key question is whether fiscal 2027 becomes the year Campbell’s establishes a credible Snacks recovery or simply another transition year. Evidence of improving consumption, successful innovation, disciplined trade spending and visible cost savings would strengthen the case that margins can rebuild. Continued volume deterioration, higher inflation or weaker-than-expected price realization would leave the company more dependent on financial and cost actions than on underlying growth.