Packaged food company Campbell's (NASDAQ: CPB) met Wall Street’s revenue expectations in Q2 CY2026, but sales fell by 7.9% year on year to $2.14 billion. Its non-GAAP profit of $0.39 per share was in line with analysts’ consensus estimates.
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Campbell's (CPB) Q2 CY2026 Highlights:
- Revenue: $2.14 billion vs analyst estimates of $2.14 billion (7.9% year-on-year decline, in line)
- Adjusted EPS: $0.39 vs analyst estimates of $0.39 (in line)
- Adjusted EPS guidance for the upcoming financial year 2027 is $1.73 at the midpoint, missing analyst estimates by 9.3%
- Operating Margin: 0.2%, down from 11.6% in the same quarter last year
- Free Cash Flow Margin: 6.4%, similar to the same quarter last year
- Organic Revenue fell 1% year on year (miss)
- Sales Volumes fell 1% year on year (-4% in the same quarter last year)
- Market Capitalization: $7.09 billion
Company Overview
With its iconic canned soup as its cornerstone product, Campbell's (NASDAQ: CPB) is a packaged food company with an illustrious portfolio of brands.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $9.74 billion in revenue over the past 12 months, Campbell's is one of the larger consumer staples companies and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when your existing brands have penetrated most of the market. For Campbell's to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.
As you can see below, Campbell’s 1.4% annualized revenue growth over the last three years was weak as consumers bought less of its products. We’ll explore what this means in the “Volume Growth” section.
This quarter, Campbell's reported a rather uninspiring 7.9% year-on-year revenue decline to $2.14 billion of revenue, in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to decline by 1% over the next 12 months, a slight deceleration versus the last three years. This projection doesn’t excite us and implies its products will see some demand headwinds.
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Volume Growth
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.
To analyze whether Campbell's generated its growth (or lack thereof) from changes in price or volume, we can compare its volume growth to its organic revenue growth, which excludes non-fundamental impacts on company financials like mergers and currency fluctuations.
Over the last two years, Campbell’s average quarterly volumes have shrunk by 1.9%. This isn’t ideal for a consumer staples company, where demand is typically stable. In the context of its 1.8% average organic sales declines, we can see that most of the company’s losses have come from fewer customers purchasing its products.
In Campbell’s Q2 2026, sales volumes dropped 1% year on year. This result represents a further deceleration from its historical levels, showing the business is struggling to move its products.
Key Takeaways from Campbell’s Q2 Results
We struggled to find many positives in these results. Its full-year EPS guidance missed and its gross margin fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 7.4% to $22.12 immediately after reporting.
Campbell's underperformed this quarter, but does that create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
