The Campbell’s Company (NASDAQ:CPB) shares rose Tuesday after the food maker topped quarterly profit and revenue expectations despite softer sales.
Investors also weighed a fresh deal to deepen its partnership with Rao’s sauce maker La Regina and a reaffirmed earnings outlook for fiscal 2026.
The company reported first-quarter adjusted earnings per share of 77 cents, beating the analyst consensus estimate of 73 cents.
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Quarterly sales of $2.677 billion (down 3% year over year) outpaced the Street view of $2.657 billion.
Metrics
Net sales declined 4% in Meals & Beverages and fell 2% in Snacks for the quarter.
Organic net sales, which exclude the impact from divestitures, decreased 1% to $2.7 billion, primarily driven by lower volume/mix.
Adjusted EBIT decreased 11% to $383 million primarily due to lower adjusted gross profit.
Quarterly adjusted gross profit decreased to $801 million from $871 million.
Adjusted gross profit margin decreased 150 basis points to 29.9% mainly driven by cost inflation and other supply chain costs, the gross impact of tariffs, and unfavorable volume/mix.
In the first quarter, Campbell’s delivered approximately $15 million in savings, bringing total cost savings achieved to $160 million pursuant to its fiscal 2028 target of $375 million.
Cash flow from operations for the quarter was $224 million, compared to $225 million in the prior-year quarter. The decrease was primarily due to lower cash earnings, offset mainly by changes in working capital.
Deepening Rao’s Partnership
Campbell Soup has agreed to buy a 49% stake in La Regina, maker of Rao’s tomato-based sauces, for $286 million in two installments.
La Regina, founded in 1972 and a Rao’s partner since 1993, is based in Scafati, Italy, and also runs a plant in Alma, Georgia.
The deal is designed to cement Campbell’s long-term partnership with La Regina while supporting product quality, innovation, and new launches.
Campbell expects the transaction to close in the second half of fiscal 2026.
The company says the acquisition should be neutral to its reaffirmed fiscal 2026 adjusted earnings-per-share guidance.
Outlook
The company expects organic net sales in fiscal 2026 to range between a 1% decline and 1% growth, compared with fiscal 2025 organic sales of $9.98 billion.
Adjusted EBIT is projected to decline between 9% and 13% from fiscal 2025 levels of $1.46 billion.
Adjusted earnings per share are forecast in a range of $2.40 to $2.55, representing a 12% to 18% decline from fiscal 2025 adjusted EPS of $2.91. The guidance aligns with the prior range and sits around the Street’s $2.45 estimate.
CPB Price Action: CPB shares were up 1.03% at $30.35 during premarket trading on Tuesday, according to Benzinga Pro data.
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