Campbell’s Stock (CPB) Under Pressure Ahead of Earnings

Campbell's stock (NASDAQ:CPB) is under pressure ahead of earnings, down 28.54% YTD, and within touching distance of a new low. With earnings up before the opening bell, bulls will be reflecting on a challenging year for the iconic food brand leading in, and looking for a shift in sentiment.

Analysts expect the company to deliver an EPS of $0.73 for the quarter, on revenue of $2.66 billion. Both figures represent a decline Y/Y, from $0.89, and $2.77 billion respectively.

October saw CPB's stock decline by 1.94%, hitting its lowest level since July. Analyst downgrades, stemming from operational struggles in the snack division, fueled this downturn. Concerns centered on a 4% margin reduction attributed to U.S. tariffs and difficulties in adapting to evolving consumer preferences for healthier, plant-based snack options. Competitors like PepsiCo have been more successful in capturing market share in these growth segments.

Todd Cunfer's appointment as CFO signaled a strategic shift, but the market remains cautious. The company faces execution risks amid persistent inflationary pressures and rising interest rates. These macroeconomic factors add complexity to Campbell's turnaround efforts.

Earlier in the year, CPB's stock touched a 52-week low of $32.83 in June off the back of persistent cost inflation and weak performance in the Snacks segment. In the third quarter of fiscal 2025, the Snacks division reported an 8% year-over-year decline in net sales, with organic net sales down 5%. Adjusted gross profit margin also decreased by 110 basis points to 30.1%, impacted by cost inflation and supply-chain expenses.

Despite these challenges, Campbell Soup remains committed to returning value to shareholders. In September, the Board of Directors declared a regular quarterly dividend of $0.39 per share, payable in November. This consistent dividend payout provides some stability amidst market volatility.

The key question now is whether Campbell Soup can deliver earnings that exceed expectations and provide a positive outlook for the coming quarters. The company's ability to navigate cost pressures, revitalize its snack division, and adapt to changing consumer preferences will be critical factors in determining what happens from here.

Campbell's stock has found some support at $30 leading in to earnings, yet anything less than a solid print could well see a new low. To the upside, the area around $31.50 has provided some resistance in previous attempts, giving us some levels to watch.