To The Moon

$Campbell Soup(CPB)$ is scheduled to report its fiscal Q4 2025 earnings on Wednesday, September 3, 2025, before the market opens.

In this article I would like to share my analysis of what to watch for and a look at potential short-term trading opportunities.

Earnings Per Share (EPS): The consensus EPS forecast is $0.57, which would represent a year-over-year decline. It is important to compare the reported figure against this consensus. A significant beat could positively surprise the market, while a miss could lead to a negative reaction.

Revenue: The forecast for Q4 revenue is approximately $2.33 billion. Investors should look at both the reported net sales and the organic net sales. Organic net sales, which exclude the impact of acquisitions and divestitures (such as the recent acquisition of Sovos Brands), are a crucial indicator of the company's underlying business health. In Q3, the Meals & Beverages division showed strong organic growth, while the Snacks division experienced a decline. Investors will be looking for a reversal or improvement in the Snacks segment's performance.

Campbell Soup (CPB) Fiscal Q3 2025 Earnings Summary

Campbell Soup reported its fiscal Q3 2025 earnings on June 2, 2025, with a mixed but overall positive reception from the market. The company beat analyst expectations on both the top and bottom lines, but the results also highlighted the ongoing challenges in certain segments.

Key Financial Highlights:

Adjusted Earnings Per Share (EPS): Campbell's reported adjusted EPS of $0.73, which exceeded the Zacks Consensus Estimate of $0.65. This was a 3% decrease year-over-year, primarily due to higher debt and interest rates, but it was a notable beat on expectations.

Revenue: Net sales increased by 4% to $2.48 billion, surpassing the analyst consensus of $2.44 billion. This growth was largely attributed to the company's recent acquisition of Sovos Brands, which contributed significantly to the Meals & Beverages segment. Organic net sales, which exclude the impact of acquisitions and divestitures, rose by a more modest 1%.

Segmental Performance: The report revealed a clear tale of two segments:

Meals & Beverages: This division was the star performer, with a 15% increase in net sales. Organic net sales in this segment grew by a strong 6%, driven by robust performance in U.S. soup, Rao's pasta sauces, and the Canadian market. The company noted that this was due to increased at-home cooking and consumers seeking value and convenience.

Snacks: The Snacks segment continued to face headwinds. Net sales for the division were down 8% year-over-year, with a 5% decline in organic net sales. This was attributed to category softness and intense competition, particularly impacting key brands like Goldfish crackers and Snyder's of Hanover pretzels.

Margins: Adjusted gross profit margin declined by 110 basis points to 30.1%, primarily due to cost inflation and other supply chain expenses. However, the company noted that these were partially offset by supply chain productivity and cost-saving initiatives.

Lessons Learned from the Guidance

The guidance provided by Campbell Soup for the rest of fiscal 2025 and its commentary on the future offer several key takeaways for investors and a lesson in managing expectations in a complex economic environment.

The Sovos Brands Acquisition is Crucial: The most significant driver of Campbell's top-line growth was the Sovos Brands acquisition. The company's reported net sales would have been much weaker without it. This underscores a key lesson for investors: acquisitions can mask underlying weakness in a company's core business. The true test of the acquisition's success will be its long-term integration and its ability to contribute to the bottom line as well as the top line.

Weakness in the Snacks Segment is a Persistent Problem: While the Meals & Beverages business is thriving, the continued struggles of the Snacks segment are a major concern. Management explicitly stated that the adjusted EPS for the full year is expected to be at the low end of the guidance range due to the "slower-than-anticipated recovery in the Snacks business." This is a stark reminder that even a strong performance in one area cannot fully compensate for weakness in another, especially in a diversified consumer goods company.

Tariffs Add an Element of Uncertainty: Campbell's guidance for fiscal 2025 explicitly excluded the impact of potential import tariffs, noting that they could represent an additional headwind of up to $0.03 to $0.05 per share. The lesson here is that in today's global economy, macroeconomic and geopolitical factors—such as tariffs and trade disputes—can have a direct and material impact on corporate earnings. Companies are often unable to fully predict or control these factors, and their guidance will reflect this uncertainty.

"Beat and Hold" vs. "Beat and Raise": While Campbell's beat expectations for the quarter, it did not "raise" its full-year guidance in a meaningful way. Instead, it reaffirmed the previous range but directed investors to the lower end. This is a common and important signal from management. It suggests they are still cautious about the future, despite the strong quarterly performance. This is a crucial distinction for traders and investors, as a "beat and hold" or a "beat and lower" can often lead to a muted or negative stock reaction, even after a positive earnings report. The lesson is to look beyond the headline numbers and scrutinize the guidance for clues about management's confidence and the company's future trajectory.

Key Metrics and Analyst Expectations

Analysts are generally forecasting a mixed quarter for Campbell Soup, with a focus on how the company's core businesses are performing amid a challenging consumer environment. The key metrics to watch are:

Segmental Performance: The performance of the two main divisions, Meals & Beverages and Snacks, will be closely scrutinized.

Meals & Beverages: This segment has been a strong performer, benefiting from increased at-home cooking. The integration of the Sovos Brands acquisition, which includes brands like Rao's, will also be a point of focus. Investors will be interested in whether the momentum in U.S. soup, Rao's, and Canada continues.

Snacks: The Snacks division has faced headwinds from persistent category declines and tough competition. Any commentary from management on new initiatives or improvements in this segment could influence investor sentiment.

Gross Profit Margin: Rising costs and inflationary pressures have impacted margins across the consumer goods sector. Investors should pay close attention to the company's gross profit margin and adjusted gross profit margin. Management's comments on supply chain efficiency, cost-saving initiatives, and pricing strategies will be critical.

Fiscal 2026 Guidance: Perhaps the most important factor for long-term investors is the company's outlook for the upcoming fiscal year. Campbell Soup's guidance for fiscal 2025 has been impacted by potential tariffs. The full-year guidance for fiscal 2026 for net sales, organic net sales, and adjusted EPS will be a significant driver of the stock's movement.

Campbell Soup (CPB) Price Target

Based on 19 analysts from Tiger Brokers offering 12 month price targets for Campbell Soup in the last 3 months. The average price target is $34.96 with a high forecast of $61.33 and a low forecast of $28.00. The average price target represents a 9.50% change from the last price of $31.93.

Short-Term Trading Opportunities

Earnings reports can create significant volatility, which can present opportunities for short-term traders.

Pre-Earnings Volatility: The stock has been on a losing streak and analysts have a "Strong Sell" rating on the stock, which suggests a negative sentiment. This could lead to increased volatility leading up to the report.

Post-Earnings Reaction: The immediate stock price movement will likely hinge on the surprise factor of the reported numbers and the guidance provided.

Potential for a "Beat and Raise": If CPB reports better-than-expected EPS and revenue, and more importantly, provides an optimistic outlook for fiscal 2026, the stock could see a significant short-term rally. This is often referred to as a "beat and raise" and can create a strong buying opportunity.

Potential for a Sell-off: If the company misses analyst expectations or provides a weak outlook, particularly concerning its struggling Snacks segment or the impact of tariffs, the stock could face a sharp decline.

The "Priced-In" Factor: Given the already negative sentiment and the recent lower revisions to EPS estimates, some of the bad news may already be "priced in." If the results are not as bad as feared, the stock could hold its ground or even see a relief bounce.

Trading Strategy Considerations:

Directional Plays: A trader might take a long position (buying) if they believe the company will outperform expectations and guidance will be strong. Conversely, they might take a short position (selling) if they expect a significant miss.

Volatility Plays: For traders who want to capitalize on volatility without predicting the direction of the stock, options strategies such as straddles or strangles could be considered. These strategies are profitable if the stock makes a large move in either direction, but they can be costly if the stock's price remains stable.

Option Selection (Based on $31.93 Spot)

Note: These are estimated premiums based on typical CPB IV levels and bid-ask spreads. You may want to confirm with live data closer to execution

Total Cost & Breakevens

• Total Debit: ~$0.85

• Upper Breakeven: $34.85

• Lower Breakeven: $30.15

Strategic Rationale

• CPB’s earnings surprises are usually modest, but the stock has traded near its 52-week low—any upside guidance or margin improvement could trigger a relief rally.

• Conversely, weak snack segment performance or margin compression could push it lower.

• The strangle allows you to benefit from either scenario, especially if IV expands post-earnings.

Risk Management

• Consider closing the position if CPB remains range-bound post-earnings and IV collapses.

• Alternatively, roll into a calendar or condor if directional conviction emerges.

Technical Analysis - Exponential Moving Average (EMA)

We are seeing a negative momentum for quite a long time and the current trend suggest that CPB might see a further bearish movement, though we are seeing a consolidation around the 12-EMA and 50-EMA level, CPB is trading far away from its 200-day period.

So if there is any earnings beat, and since the negative sentiment and the recent lower revisions to EPS estimates, some of the bad news may already be "priced in., we could see a nice rebound if CPB could provide an earnings surprise or even a beat.

Summary

Campbell Soup (CPB) is set to report its fiscal Q4 2025 earnings on September 3, 2025. Analysts project a mixed report, with revenue of approximately $2.33 billion (a 1.8% increase) and a decline in earnings to $0.57 per share.

Key metrics to watch include:

Segment Performance: The strong performance of the Meals & Beverages division (driven by Rao's and soup sales) vs. the struggling Snacks division (facing competition and category softness).

Margins: How the company is managing cost inflation and supply chain pressures.

Fiscal 2026 Guidance: The most critical factor. Investors will be looking for the company's outlook on sales, organic growth, and adjusted EPS, particularly regarding the impact of potential tariffs and the continued turnaround of the Snacks business.

Given the stock's recent decline and negative analyst sentiment, a surprise beat or a strong outlook could trigger a short-term rally. Conversely, a weak report or cautious guidance could lead to a further sell-off.

Appreciate if you could share your thoughts in the comment section whether you think CPB would be able to produce better margins if they could manage their cost and supply chain pressures well.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.