CAMPBELL'S (CPB) Q3 FY26 earnings call: guidance and Q&A

Can you frame the magnitude of the key FY27 headwinds (including up to 2-3% unmitigated inflation) and the size of potential mitigating actions, with productivity presumably offsetting baseline inflation?

Base inflation ~3%, plus 2-3% more if oil holds ~$100/bbl; add a driver-shortage freight squeeze and a ~$40M incentive-comp reset and higher marketing. Offsets: elevated productivity, fast-forwarding the $100M SG&A takeout (with an early retirement package), aggressive trade-ROI work, and net price realization as a last resort.

“if oil stays around $100 a barrel, we're looking at an additional 2% to 3% inflation on top of the core 3%”

asked by Andrew Lazar · answered by Todd Cunfer

Given FY27 costs and reinvestment, what changes in capital allocation may be needed and what are your current thoughts on the dividend?

Dividend is important and there is no intention to increase it anytime soon; the priority is deleveraging to the low 3s over the next couple of years while protecting the investment-grade rating via working-capital reduction, high-priority-only CapEx and possible hybrid debt. M&A is off the table.

“we are getting very aggressive on how we can get back down to the low 3s over the next couple of years.”

asked by Andrew Lazar · answered by Todd Cunfer

Which brands are in scope for rationalization, does 'nodes in the network' mean manufacturing or distribution, and what is the timing? Also, can you frame the Q4 tariff refund?

Simplification means focusing brands on their core (Goldfish/kids), backing fewer bigger innovations, disciplined brand-support allocation, and cutting a low-sales SKU tail to improve efficiency across the network. The Q4 tariff refund is ~$0.03-$0.04/share (direct Rao's/La Regina piece plus a smaller vendor piece that may slip to FY27), offset by higher fuel/conflict costs.

“the impact we're projecting for Q4 from a tariff refund is about $0.03 to $0.04 a share”

asked by Thomas Palmer · answered by Mick Beekhuizen

Can you unpack the Q4 organic sales outlook (which implies material improvement) and frame what pushes EPS to the high vs. low end of the range given the higher share count and input costs?

Q4 net sales flattish to slightly up: M&B solid on the ~$30M Rao's ERP-lap reversal, innovation pipeline fill and slightly positive consumption; Snacks similar to or slightly worse than Q3. Full-year net sales at the low end of -1% to -2% and EPS ~$2.20 or below, with ~306M shares (up from 299M) from the La Regina acquisition weighing on EPS.

“the EPS still some moving parts there but that probably is more $2.20 to below.”

asked by Peter Grom · answered by Todd Cunfer

Does the FY27 outlook include the stepped-up La Regina share count, and how do you reconcile a higher-coupon hybrid issuance with the goal of stabilizing earnings?

Yes — ~306M shares for the full year including FY27. Hybrid debt runs ~150-200 bps higher coupon (an EPS drag, EBITDA-neutral) but typically earns ~50% equity credit, a positive with rating agencies; management is balancing shareholder and credit considerations.

“the hybrid debt, as you said, tends to be 150, 200 basis points higher... you tend to get about 50% equity credit.”

asked by Peter Galbo · answered by Todd Cunfer

How did the Q3 Snacks margin come in versus your expectations, was there a timing benefit from lower marketing, and can we expect stabilization from here?

Snacks EBITDA margin rose to ~10% from a little over 7% in Q2, in line with expectations but still ~down 400 bps YoY. Gains came from lower trade spend (RGM) and somewhat less marketing; bakery cancelled promotions to fix on-shelf availability, hurting volume but helping margin. Q4 similar; multi-year improvement needs Goldfish growth, simplification-driven mix, and lower fixed costs.

“we went from EBITDA margin last quarter, a little over 7% to about 10% this quarter... both quarters were still down around 400 basis points year-over-year”

asked by Christopher Carey · answered by Todd Cunfer

How does the FY27 inflation cadence flow through the year given hedges rolling off, and where are you hedged today?

FY26 is almost fully hedged; some FY27 first-half hedges are in place but slightly below normal given elevated prices. First-half FY27 inflation will be high regardless as oil/fertilizer/aluminum prices stay elevated even if the conflict ends; the second half determines whether full-year inflation trends toward 3% or 5-6%.

“we're almost fully hedged for our fiscal year '26 which ends in July... we probably have a little bit less than we would normally do”

asked by Megan Christine Alexander · answered by Todd Cunfer

Any thematic detail on which trade programs work — deeper vs. longer deals, and what you're eliminating?

Shelf-only TPRs deliver weak returns and are being limited; feature-and-display ROIs are strong and get the investment, with a willingness to walk from TPRs lacking feature/display. Mick added the importance of right price points during key drive periods and price-pack architecture — Goldfish multipacks grew 6% in the last 13 weeks.

“in the last 13 weeks, actually, multipacks is growing 6%.”

asked by Robert Moskow · answered by Mick Beekhuizen

Is there risk retailers pressure you to give back tariff refunds, and is the 2-3% incremental FY27 inflation a holistic number beyond oil?

There's always risk, but with gross margins already unable to fully offset tariffs and normal inflation (only minimal pricing taken this year), management intends to retain the refunds. The incremental 2-3% is holistic — oil directly plus its flow-through into packaging and logistics, elevated aluminum, and potential fertilizer impacts.

“our intention is not to refund any of those tariffs.”

asked by Max Andrew Gumport · answered by Todd Cunfer