Campbell Soup Company

No full-quarter revenue or EPS figures were given on this Q&A-only call. Todd Cunfer said Q3 Snacks EBIT margin improved to about 10% from a little over 7% in Q2, but was still down around 400 basis points year over year; he also said organic gross margin in Q4 should be similar to Q3, which was down 240 basis points. For Q4, management expects net sales to be flattish to slightly up, with M&B benefiting from a $30 million lap from the ERP conversion affecting Rao’s in Q3, while Snacks may be similar to or slightly worse than Q3. Todd said the Q4 tariff refund contribution is about $0.03 to $0.04 per share, partly offset by higher fuel, driver shortages, and Iran conflict-related costs, and Q4 EPS is expected to be around $2.20 or below. He also said Q4 share count will rise from 299 million to 306 million due to the La Regina acquisition, with about 306 million shares for the full year.

Mick Beekhuizen framed the quarter around simplification and a sharper focus on the core of the portfolio. He said Goldfish’s core household-with-kids strategy is working, Meals & Beverages is supported by resilient at-home cooking demand, and the company is leaning into fewer, bigger innovation bets rather than broad SKU proliferation. His tone was constructive but candid: Snacks still has work to do, especially on salty and mainstream ready-to-serve soup, and some of that improvement will take time.

Todd Cunfer emphasized that inflation and cost volatility are the main financial issue heading into FY27. He quantified base inflation at about 3% before the Middle East conflict, with an additional 2% to 3% if oil stays around $100, plus a roughly $40 million incentive comp reset, higher marketing, and higher diesel/logistics costs from driver shortages. He said the company will rely on elevated productivity, the previously announced $100 million SG&A takeout, tighter trade ROI discipline, selective pricing only as a last resort, aggressive working-capital reduction, focused CapEx, and possible hybrid debt to support the investment-grade rating and get leverage back to the low 3s.

Analysts focused on FY27 inflation, pricing, capital allocation, and the path to fixing Snacks. Management said the best estimate is about 5% to 6% inflation if current energy conditions persist, with the first half of the year likely to be the most pressured, while cost savings and RGM actions will be used before list-price increases. On capital allocation, Todd said the dividend is important but there is no intention to raise it anytime soon, M&A is off the table, and deleveraging is the priority. On Snacks, management said feature-and-display promotions generate strong ROI, while shelf-only TPRs often do not, and they are willing to walk away from weak deals.