Campbell’s (NASDAQ:CPB) executives spent much of the company’s fiscal second-quarter 2026 Q&A focused on stabilizing its snacks business, addressing fresh bakery execution issues, and outlining a more cash-focused capital allocation posture amid lower earnings and elevated leverage. Chief Executive Officer Mick Beekhuizen and Chief Financial Officer Todd Cunfer also discussed pricing and promotional tactics across snacks and meals, as well as expectations for second-half cadence.
Snacks: focus on Goldfish momentum, fresh bakery stabilization, and chip competitiveness
Management described three top-line priorities in snacks: Goldfish, fresh bakery, and salty snacks. Beekhuizen said the company aims to maintain Goldfish momentum seen in the first half and drive sequential progress in the back half, emphasizing in-market consumption.
On salty snacks, Beekhuizen said the company needs to improve competitiveness through:
- Pricing competitiveness
- “Blocking and tackling” execution in-market
- Portfolio evolution via innovation, including premium, better-for-you offerings and flavor exploration
He characterized the competitive intensity as most pronounced in chips (as opposed to pretzels), where the company plans a “surgical” promotional approach focused on being competitive “in the areas that matter during the times it also really matters.” He added that price-pack architecture changes can help but may take longer. In response to questions about rivals taking more permanent everyday price moves, Beekhuizen said Campbell’s believes its Cape Cod and Kettle Brand positioning gives it a “right to win” in kettle chips, and that while promotions may resolve most gaps, the company could selectively reset pricing more permanently where list price gaps are too large.
Snack margins: deleverage and bakery issues drove sharp pressure; improvement expected later in H2
Cunfer called snack profitability in the quarter “very poor performance,” noting segment margin fell 390 basis points. He attributed roughly one-quarter of the decline to the bakery performance issues and about three-quarters to deleverage: with net sales down 6%, the company saw meaningful fixed-cost deleverage in the plant network, alongside continued marketing and SG&A investment.
For the second half, Cunfer said snacks margin should be “a bit better” in the third quarter but not dramatically improved, citing ongoing bakery stabilization efforts and higher marketing in Q3. He expressed greater confidence in a stronger fourth-quarter margin profile, tied to a more stabilized bakery business, lower advertising year-over-year in Q4, and increased Goldfish activity (which he described as the highest-margin product line in the snacks portfolio).
Management also addressed capacity and utilization, with Cunfer acknowledging that investments—particularly in Goldfish capacity—were made coming out of the pandemic when the company expected volume growth to continue. With volumes not growing as anticipated, he said higher fixed costs have contributed to margin pressure, reinforcing management’s focus on restoring volume.
Pricing and promotions: reallocations toward sharper value while keeping brand support
Cunfer said the company expects marketing spending to still be up year-over-year, though not as much as initially planned, while also leaning “a little bit more heavily into price” in select areas where it sees gaps—citing broth and chips as examples. He framed the changes as not “dramatic” in overall trade philosophy, but acknowledged an incremental earnings headwind from increased trade and promotional activity.
Beekhuizen emphasized a selective approach to allocating dollars between marketing and trade, calling out continued support for Rao’s on the meals and beverages side and Goldfish on the snacks side. On price-pack architecture, he noted some changes can be longer-cycle if they require package format changes, but others can be more immediate, such as leaning into Goldfish multipacks and using promotions on larger pack sizes to hit attractive consumer price points. He also said the company is working to realign price-per-ounce across pack sizes, noting some are “below where they should be” while others are “above,” and suggested improved alignment could create margin opportunity over time.
Capital allocation: prioritizing cash flow, debt reduction, and tighter spending
On capital allocation, Cunfer said cash flow preservation has become “extremely imperative” given current leverage and lower earnings. He outlined a more restrictive posture, including:
- No share buybacks, including anti-dilutive buybacks
- No dividend increase “anytime soon,” while maintaining the dividend’s importance
- Tighter capital spending, noting CapEx was already reduced by $50 million for the year
- Tighter working capital management
He reiterated a previously discussed $100 million overhead cost reduction plan expected to play out over the next couple of years. Cunfer also discussed the La Regina acquisition, saying it is not expected to be significant to near-term cash flow, with one payment of roughly $140 million to $150 million expected before year-end. He noted the second payment, due about a year later, could be funded with equity at the company’s option. Cunfer said bringing leverage “down closer to three than to four” is imperative.
Back-half cadence and meals and beverages: Rao’s strength, sauces launch, and broth competitiveness
When asked about earnings cadence, Cunfer confirmed expectations that third-quarter performance would look similar to the second quarter, with improved performance in the fourth quarter. He attributed some Q4 confidence to lapping last year’s Sovos ERP conversion timing that shifted volume into Q3 from Q4, anticipated snacks stabilization, lower year-over-year tariff pressure in Q4 as the company laps prior-year impacts, and lower advertising spend year-over-year in Q4.
On sales, Cunfer said snacks would likely be down about 4% in the second half, “fairly balanced” between Q3 and Q4, with Q4 a bit better than Q3, while emphasizing that the company expects margin stabilization even if top-line improvement is gradual.
In meals and beverages, Beekhuizen highlighted strong Rao’s performance and said the company is encouraged by cooking-oriented demand. He said Campbell’s condensed portfolio was relatively flat in the quarter because the cooking/ingredient portion (a little over half of the condensed portfolio) was growing while the eating portion was declining. He discussed an expansion into Campbell’s condensed sauces, set to be introduced in June, calling it incremental and complementary to cooking soups and broth.
On broth, Beekhuizen said both Pacific Foods and Swanson grew in the quarter, though he acknowledged some share pressure anticipated from private label recovery. He noted Pacific Foods was growing double digits, while pressure was “probably” greater on Swanson. He said the company is monitoring price gaps to private label and plans to stay competitive during key periods such as holidays.
For the back half, Beekhuizen said meals and beverages should still see positive net price realization, though less than earlier in the year due to investments in broth and Rao’s. He also suggested consumption could face some pressure in the second half, with an in-market consumption expectation around 0% to slightly negative. He said Rao’s in-market consumption grew 14.5% in the second quarter and reiterated expectations for high-single-digit growth for the full year.
About Campbell’s (NASDAQ:CPB)
Campbell’s (NASDAQ: CPB) is a leading manufacturer of shelf-stable foods and beverages, best known for its iconic soups and broths. Headquartered in Camden, New Jersey, the company offers a diverse portfolio of products designed to meet consumer demand for convenient, affordable meals and snacks. Since its founding in 1869, Campbell’s has grown through a combination of organic innovation and strategic acquisitions to expand its presence in the food industry.
The company’s brand portfolio includes Campbell’s Condensed Soups, V8 juices, Prego pasta sauces, Swanson broths and stocks, Pace salsas and dips, and Pepperidge Farm baked snacks.
