Business Overview
Campbell's story began in 1869 when Joseph Campbell and Abraham Anderson founded the company in Camden, New Jersey. Initially focused on canned tomatoes, vegetables, jellies, and minced meats, the company quickly expanded its product portfolio, introducing its iconic Campbell's Condensed Soup line. Throughout the early 20th century, Campbell's continued to grow and diversify, acquiring the V8 juice brand and expanding into new product categories like cookies and crackers through the acquisition of Pepperidge Farm in 1961.
In the early 2000s, Campbell's faced challenges due to shifting consumer preferences towards healthier, less processed foods. The company responded by evolving its portfolio, acquiring natural and organic brands like Bolthouse Farms and Pacific Foods to better align with these trends. This strategic move helped Campbell's maintain its position as a leading North American food company.
A significant milestone in Campbell's history was the 2018 acquisition of Snyder's-Lance, a major snack food company. This expansion into the fast-growing snacking category added iconic brands like Snyder's of Hanover pretzels and Kettle Brand potato chips to its portfolio. The integration of Snyder's-Lance was a significant operational undertaking for the company over the following years, further diversifying its product offerings and strengthening its market position.
Today, Campbell's operates two major divisions: Meals & Beverages and Snacks. The Meals & Beverages segment includes a diverse range of products, such as Campbell's condensed and ready-to-serve soups, Swanson broths, Prego pasta sauces, and the recently acquired Rao's pasta sauces. The Snacks segment encompasses beloved brands like Pepperidge Farm cookies and crackers, Goldfish crackers, Snyder's of Hanover pretzels, and Cape Cod potato chips.
Financial Performance and Ratios
In fiscal year 2024, Campbell's reported total revenue of $9.64 billion, a 3% increase from the previous year. Net income for the same period stood at $567 million, translating to earnings per share of $1.89. The company's operating cash flow was $1.19 billion, and free cash flow reached $668 million.
In the most recent quarter (Q2 2025), Campbell's reported revenue of $2.69 billion, representing a 9% increase year-over-year, primarily driven by the Sovos Brands acquisition. However, organic net sales declined by 2%. The company's net income for the quarter was $580 million, while adjusted EBIT increased by 2%.
Campbell's financial ratios showcase its strong financial position. The company's current ratio, a measure of short-term liquidity, stood at 0.93 as of the end of fiscal 2024, indicating a solid ability to meet its short-term obligations. The debt-to-equity ratio of 1.96 suggests a moderate level of leverage, and the interest coverage ratio of 4.33 demonstrates the company's capacity to service its debt.
Liquidity
Campbell's has maintained a strong liquidity position, which is crucial for navigating economic uncertainties and funding growth initiatives. The company's current ratio of 0.93 and quick ratio of 0.55 indicate that it has sufficient short-term assets to cover its short-term liabilities. Additionally, Campbell's robust operating cash flow of $1.19 billion and free cash flow of $668 million in fiscal 2024 provide further evidence of its solid liquidity position and ability to generate cash from its operations.
As of Q2 2025, Campbell's reported cash and cash equivalents of $829 million. The company also maintains a $1.85 billion revolving credit facility, which was undrawn as of Q2 2025 except for $1 million in standby letters of credit, providing additional financial flexibility.
Diversified Product Portfolio and Continued Innovation
One of Campbell's key strengths is its diversified product portfolio, which allows the company to cater to a wide range of consumer preferences. The Meals & Beverages segment, which accounts for approximately 60% of the company's total revenue, has demonstrated resilience, with brands like Campbell's condensed soups, Swanson broths, and the recently acquired Rao's pasta sauces driving consistent performance.
The Snacks segment, which makes up the remaining 40% of revenue, has been a focus of innovation and strategic investments. The company has successfully integrated its acquisition of Snyder's-Lance, a leading provider of salty snacks, and has been actively expanding its presence in the growing snacking category through product launches and brand enhancements.
In Q2 2025, the Meals & Beverages segment reported net sales of $1.68 billion, a 21% increase compared to the prior year period, primarily driven by a 23-percentage point benefit from the Sovos Brands acquisition. Excluding the acquisition, segment sales declined, due to decreases in SpaghettiOs and U.S. soup, partially offset by gains in foodservice. Segment operating earnings increased 18% to $291 million.
The Snacks segment reported net sales of $1.01 billion in Q2 2025, a 6% decrease compared to the prior year period. Excluding the impact of the Pop Secret divestiture, segment sales declined due to decreases in third-party partner brands, contract manufacturing, Goldfish crackers, and Snyder's of Hanover pretzels. Segment operating earnings decreased 29% to $114 million, primarily due to lower gross profit and higher marketing and selling expenses.
Navigating Evolving Consumer Trends
Campbell's has consistently demonstrated its ability to adapt to changing consumer preferences. The company has responded to the growing demand for healthier, more natural products by expanding its portfolio of organic and better-for-you offerings, such as the Rao's and Pacific Foods brands.
Moreover, Campbell's has leveraged its strong brand equity to drive successful innovation, introducing new flavors and product formats to keep pace with evolving consumer trends. The company's recent launch of Goldfish Graham crackers inspired by the beloved Harry Potter franchise, as well as its introduction of Kettle Brand potato chips made with avocado oil, showcase its commitment to staying relevant and meeting the demands of today's health-conscious consumers.
Cost Savings and Operational Efficiency
In recent years, Campbell's has implemented a series of cost-saving initiatives and operational optimization programs to enhance its profitability and competitiveness. The company's multi-year cost savings program, which includes initiatives to streamline its organizational structure, optimize its supply chain and manufacturing network, and enhance its information technology infrastructure, has generated significant results.
As of the end of fiscal 2024, Campbell's had achieved approximately $950 million in pre-tax savings from these initiatives, positioning the company to navigate the current inflationary environment and invest in future growth opportunities. For fiscal year 2025, Campbell's has increased its expected cost savings from $90 million to $120 million, demonstrating its continued focus on operational efficiency.
Mitigating Risks and Uncertainties
Like any major consumer packaged goods company, Campbell's faces a range of risks and uncertainties, including volatile commodity prices, supply chain disruptions, and evolving consumer preferences. The company has demonstrated its ability to proactively address these challenges, leveraging its strong brand portfolio, operational agility, and financial discipline.
For example, in response to the ongoing global supply chain challenges, Campbell's has worked closely with its suppliers to optimize its procurement strategies and maintain uninterrupted production and distribution. Additionally, the company's diversified product mix and geographic footprint have helped to mitigate the impact of localized disruptions.
Looking Ahead: Continued Transformation and Growth
As Campbell's navigates the ever-changing consumer landscape, the company remains committed to its strategic priorities, which include strengthening its core business, driving innovation, and pursuing strategic acquisitions to enhance its growth profile.
For fiscal year 2025, Campbell's has provided updated guidance, expecting reported net sales to increase approximately 6% to 8%, including a 1 percentage point impact from the divestiture of noosa. Organic net sales are expected to be in the range of down 2% to flat, excluding the 53rd week. The company anticipates adjusted EBIT growth of 3% to 5%, inclusive of the impact of the noosa divestiture, and adjusted EPS in the range of $2.95 to $3.05, inclusive of a $0.01 dilutive impact from the noosa divestiture.
Campbell's expects adjusted marketing and selling expense for the full-year and the second half to be at the lower end of their targeted range of 9% to 10% of net sales. Net interest expense is projected to be between $325 million to $330 million for the full year, while capital expenditures are expected to be approximately 4.7% of net sales.
The successful integration of the Sovos Brands acquisition, completed in March 2024, has bolstered Campbell's position in the attractive Italian sauce category through the addition of the Rao's brand. The company's long-term growth plans for Rao's, which it expects to become a $1 billion brand, underscore its commitment to leveraging its brand portfolio to drive sustained value creation.
Conclusion
The Campbell's Company has weathered numerous challenges throughout its illustrious 155-year history, emerging as a resilient and adaptable player in the consumer packaged goods industry. With its diversified product portfolio, focus on innovation, and ongoing operational optimization, Campbell's is well-positioned to navigate the evolving consumer landscape and continue delivering value to its shareholders.
As the company navigates the current inflationary environment and adapts to shifting consumer preferences, investors can take comfort in Campbell's long-standing reputation for quality, its strong brand equity, and its demonstrated ability to execute on its strategic priorities. The company's performance in recent quarters, including the successful integration of Sovos Brands and the ongoing cost savings initiatives, highlights its commitment to growth and operational excellence in a challenging market environment.