Campbell’s Co (NASDAQ:CPB) stock fell 2.27% (As on September 4, 11:21:38 AM UTC-4, Source: Google Finance) after the company said it will remove synthetic dyes from its food and beverage portfolio starting in fiscal 2026 and forecast annual profit below Wall Street expectations, hurt by higher tariffs. The company will replace artificial dyes in products like Lance crackers and V8 Splash with natural colors from sources like annatto and purple carrot juice. Its regional snack and cookie brands will also stop using synthetic colors. Campbell’s said tariffs are expected to account for roughly 4% of cost of goods sold in fiscal 2026. It plans to offset about 60% of that impact through selective price increases and cost savings.
Moreover, in-market consumption during the quarter declined 1%, while organic net sales declined 3%, with the bulk of the difference being driven by the favorable shipment timing in the third quarter, reversing in Q4. The in-market contribution of the 16 leadership brands, representing approximately 90% of total net sales, remained stable in the fourth quarter, with seven of the brands gaining or holding share.
CPB in the fourth quarter of FY 25 has reported the adjusted earnings per share of $0.62, beating the analysts’ estimates for the adjusted earnings per share of $0.56, as per analysts polled by FactSet. The company had reported the adjusted revenue of $2.32 billion in the fourth quarter of FY 25, missing the analysts’ estimates for revenue of $2.33 billion. Campbell’s has seen an uptick in demand as more cash-strapped consumers cook at home, seeking healthy and budget-friendly options. The company also indicated momentum from Rao’s, which is on track to become Campbell’s fourth billion-dollar brand, joining its namesake soup line, Goldfish, and Pepperidge Farm. In total, Meals and Beverages leadership brand consumption increased by 1% in Q4 and 2% for the full year. The dollar consumption in the Italian sauce category grew 2% year-over-year in Q4, similar to the past two quarters. Campbell Soup Company’s Italian sauce portfolio outpaced this mark, growing dollar consumption by 4%. In cookies, the company gained share as it grew consumption during the quarter, outperforming the category through successful innovation launches, most notably the Milano White Chocolate lineup.
The company expects annual adjusted profit per share to fall up to 18% to between $2.40 and $2.55, including tariffs, below the estimates of $2.63, according to data compiled by LSEG. Net sales were forecast in the range of flat to decline of 2%, compared with expectations of a 2.4% drop.