CAMPBELL'S Q3 FY26 earnings call CPB

This transcript is the live Q&A session only; management's prepared remarks were published separately as a written and audio recording, alongside the press release, Form 10-Q and slide deck. As a result there is no prepared-remarks P&L walk or segment financial detail here — the figures below are those surfaced or reconfirmed in analyst exchanges. Participants were CEO Mick Beekhuizen and CFO Todd Cunfer, with IR chief Joshua Levine hosting.

Management framed FY27 around a base inflation of ~3% that could climb to 5-6% if oil holds near $100/bbl, layering in oil-linked packaging and logistics costs, a driver-shortage-driven freight squeeze, elevated aluminum, and potential fertilizer impacts on farming inputs. Add a ~$40M incentive-comp reset and anticipated higher marketing. To offset, Campbell's is relying on elevated productivity, accelerating the $100M SG&A takeout into FY27, aggressive trade-ROI optimization, and — only as a last resort — surgical list pricing. First-half FY27 inflation is viewed as largely locked in high; the second half hinges on whether the conflict eases.

Snacks EBITDA margin improved sequentially to ~10% (from a little over 7% in Q2) but remained down ~400 bps YoY, aided by lower trade spend and lighter marketing. The strategic thrust is simplification: focusing brands on their core (Goldfish on households with kids), backing fewer/bigger innovations, cutting a low-sales 'tail' of SKUs to improve plant efficiency and mix, and consolidating nodes in the manufacturing/distribution network. Goldfish has stabilized (still down 1-2%) and must return to growth as the most profitable Snacks brand; Pepperidge Farm fresh bakery is stabilizing operationally; Salty is expected to stay pressured near-term.

M&B is the relative bright spot, leaning into a resilient at-home cooking trend. Over 50% of the condensed soup portfolio is used as a cooking ingredient (e.g., cream of mushroom) and has grown consistently, underpinning the new Campbell's condensed sauces launch. Premium ready-to-serve (Rao's, Pacific, ~20% of RTS) is growing, while mainstream RTS is under pressure and will be addressed via tail reduction and better-for-you innovation. Q4 M&B net sales should be strong, helped by a ~$30M Rao's net-sales shift out of Q3 into Q4 tied to a Sovos ERP conversion, plus innovation pipeline fill.

Management is prioritizing a return to the low-3s net debt/EBITDA over the next couple of years and defending the investment-grade rating. Levers include stabilizing then growing earnings, aggressive working-capital reduction, high-priority-only CapEx, a held (not increased) dividend, and potential hybrid debt — which carries a ~150-200 bps higher coupon (an EPS drag, EBITDA-neutral) but delivers ~50% equity credit with rating agencies. M&A is off the table.

A Q4 tariff refund of ~$0.03-$0.04/share is expected, offsetting higher fuel/driver and Iran-conflict costs; a direct piece (Rao's/La Regina) is recoverable now while a smaller vendor-driven piece may slip into FY27, and management currently intends to retain the refunds despite potential retailer pushback. On RGM, the team is culling low-return trade-promotion reductions (TPRs) that lack feature/display support — where feature-and-display ROIs are strong — and optimizing price points and price-pack architecture (Goldfish multipacks +6% over the last 13 weeks).