Campbell's CEO Serves Up Warning For Restaurants As "Resilient" At-Home Cooking Trend Gains Steam

There is not much to get excited about in canned-soup maker Campbell's third-quarter results, with sales slumping and softness in its snack unit weighing on performance. But one revealing detail from management's earnings call earlier on Monday offers a broader read-through on the consumer: households may be spending much more time cooking at home and pulling back from restaurants in the second half of the year. 

The canned-soup maker reaffirmed its full-year outlook, but Wall Street analysts were muted on the third-quarter results. 

BNP Paribas Max Gumport told clients that two key concerns remain: Campbell's ability to stabilize organic sales in the snack unit and to navigate another year of elevated inflation. He noted the quarterly beat was driven largely by SG&A and below-the-line items, while the guidance reaffirmation was partly supported by an expected fourth-quarter tariff refund benefit. 

Third-quarter adjusted EPS printed at 50 cents, beating the 48-cent Bloomberg Consensus estimate but down from 73 cents in the same period one year ago. Net sales fell 4.4% to $2.37 billion, slightly below estimates. Organic net sales declined 4%, worse than the 3.3% drop analysts tracked by Bloomberg expected, with both meals & beverages and snacks down 4%.

Margins remained pressured. RBC Capital analyst Nik Modi said, "The company is navigating a challenging environment marked by inflation-driven margin headwinds and tariff impacts, which compressed adjusted gross margins by -240 bps points." 

Campbell's still expects full-year adjusted EPS of $2.15 to $2.25, versus the Bloomberg Consensus of $2.17, and organic net sales to fall 1% to 2%, versus the estimate of -2.14%. 

Notice how Campbell shares were crushed in the era of food inflation.

After the earnings release, Campbell's held an analyst call.

David Palmer, senior managing director and head of restaurant and food producers at Evercore ISI, asked Campbell's CEO Mick Beekhuizen about trends surrounding the snack-related portfolio:

Obviously, heading into fiscal '27, you're going to be dealing with the inflation you talked about, and the choices you're making around snacks and those things will be cause for noise and varying degrees of sales or profit pressure. But I'm wondering if you're just thinking about your core businesses and the goal of returning those to at least some modest growth, profitable growth. Where do you think are the near and medium-term potential wins, most improved areas that we'll see from organic sales perspective? And then I have a quick follow-up.

Beekhuizen's response revealed one very important trend: he expects at-home cooking to remain resilient in the back half of the year.

His response:

Sure. even if you look at this quarter, I'll highlight a couple of areas, and I appreciate you asking the question because there are very clear proof points in this quarter that we can continue to support. Within the meals & beverage portfolio, the at-home cooking consumer trend is resilient, and we expect that trend to continue. And that is a big part of our meals & beverage portfolio plays right into that consumer trend.

The at-home cooking comment piqued our interest because it dovetails with a recent UBS note from analyst Dennis Geiger, the bank's U.S. restaurants equity research analyst, who expects restaurant spending to remain in a "difficult cycle" through the second half of the year. That only lends credibility to Beekhuizen's view that consumers are likely to continue leaning into home meals as mounting macro pressures weigh on discretionary dining.