Campbell's Refines Portfolio Amid Acquisition, Divestitures

TL;DR

**CPB is aggressively reshaping its brand portfolio, but its heavy reliance on Walmart is a ticking time bomb for future revenue stability.**

AI Summary

Campbell's Co (CPB) reported a fiscal year ending August 3, 2025, marked by strategic portfolio adjustments and significant customer concentration. The company completed the acquisition of Sovos Brands, Inc. for $2.899 billion on March 12, 2024, expanding its Meals & Beverages segment with brands like Rao's. Concurrently, CPB divested its Emerald nuts business on May 30, 2023, Pop Secret popcorn business on August 26, 2024, and noosa yoghurt business on February 24, 2025, streamlining its Snacks and Meals & Beverages portfolios. Capital expenditures for 2025 totaled $426 million, with an anticipated $420 million for 2026, focusing on network optimization and wastewater initiatives, including $35 million for the Napoleon, Ohio facility. A significant risk is customer concentration, with the five largest customers accounting for 47% of consolidated net sales in 2025, and Walmart Stores, Inc. alone representing 21%. The strategic outlook includes managing commodity and supply chain cost volatility, with more significant tariff-driven cost pressures expected in 2026, which the company plans to mitigate through cost savings and pricing actions.

Why It Matters

Campbell's strategic moves, including the $2.899 billion acquisition of Sovos Brands and multiple divestitures, signal a clear intent to focus on higher-growth, premium segments like Rao's pasta sauces, which could boost investor confidence. However, the substantial reliance on a few key customers, particularly Walmart accounting for 21% of sales, poses a significant competitive risk, as pricing pressures or changes in purchasing strategy from these retailers could severely impact revenue. Employees may experience shifts in roles and locations, as evidenced by the consolidation of Snacks offices to Camden, New Jersey, impacting company culture and operational efficiency. For consumers, these changes mean a refined product offering, potentially with more premium options, but also the disappearance of some familiar brands from Campbell's portfolio.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant customer concentration and anticipated cost pressures. Campbell's five largest customers accounted for 47% of consolidated net sales in 2025, with Walmart Stores, Inc. alone representing 21%. This high dependency on a few customers creates vulnerability to changes in their purchasing strategies or market power. Additionally, the company expects 'more significant cost pressures primarily driven by tariff impacts' in 2026, which could erode profit margins despite planned mitigation efforts.

Analyst Insight

Investors should monitor Campbell's ability to integrate Sovos Brands and realize synergies, while also diversifying its customer base to reduce reliance on Walmart. Pay close attention to Q1 2026 earnings calls for updates on tariff impacts and the effectiveness of cost mitigation strategies, as these will directly influence profitability.

Revenue Breakdown

Key Numbers

• $2.899B — Sovos Brands Acquisition Cost (Completed March 12, 2024, expanding Meals & Beverages.)
• 21% — Sales from Walmart (Walmart Stores, Inc. accounted for 21% of consolidated net sales in 2025, highlighting customer concentration.)
• 47% — Sales from Top 5 Customers (The five largest customers accounted for 47% of consolidated net sales in 2025, indicating significant customer dependency.)
• $426M — 2025 Capital Expenditures (Invested in network optimization, IT, and environmental compliance.)
• $420M — 2026 Projected Capital Expenditures (Planned for network optimization and wastewater initiatives, including $35M for Napoleon, Ohio.)
• 13,700 — Total Employees (As of August 3, 2025, reflecting human capital.)

Key Players & Entities

• Campbell's Co (company) — registrant
• Sovos Brands, Inc. (company) — acquired company
• $2.899 billion (dollar_amount) — purchase consideration for Sovos Brands
• Walmart Stores, Inc. (company) — largest customer
• 21% (dollar_amount) — percentage of consolidated net sales from Walmart in 2025
• 47% (dollar_amount) — percentage of consolidated net sales from five largest customers in 2025
• $426 million (dollar_amount) — aggregate capital expenditures in 2025
• $420 million (dollar_amount) — expected capital expenditures in 2026
• $35 million (dollar_amount) — capital expenditures for Napoleon, Ohio wastewater facility upgrades in 2026
• August 3, 2025 (date) — fiscal year end

FAQ

Risk Factors

• Macroeconomic Conditions [high — market]: Deterioration of global macroeconomic conditions, including economic recession, slow growth, or high inflation, can adversely affect consumer spending and demand for Campbell's products. This can lead to higher commodity prices, supply chain disruptions, and a shift towards private label or lower-priced products.
• Tariffs and Trade Policies [medium — market]: The scope, timing, and duration of tariffs on imports and exports, along with potential retaliatory measures, remain uncertain and could impact Campbell's business operations and costs.
• Supply Chain and Third-Party Reliance [high — operational]: Campbell's relies on third parties for packaging, ingredients, equipment, contract manufacturing, and logistics. Failure of these third parties to meet obligations or significant disruptions in their ability to do so could adversely affect operations.
• Consumer Spending Shifts [medium — market]: During periods of economic uncertainty or inflation, consumers may shift their spending towards private label or lower-priced alternatives, impacting demand for Campbell's branded products.
• Distribution Channel Disruptions [medium — operational]: Changes in retailers', distributors', or carriers' inventory, fulfillment, or shipping practices, as well as disruptions to Campbell's own distribution capabilities or those of its partners, could negatively impact product availability.
• Financial Market Volatility [medium — financial]: Future volatility or disruption in financial markets could negatively impact Campbell's liquidity or increase its costs of borrowing.

Industry Context

The packaged food and beverage industry is highly competitive, characterized by established players and private label brands. Key trends include evolving consumer preferences towards healthier options, convenience, and sustainability. Companies like Campbell's face challenges from fluctuating commodity costs, supply chain complexities, and the need for continuous innovation to maintain market share.

Regulatory Implications

Campbell's operates under various food safety regulations, labeling requirements, and environmental standards. Changes in these regulations, particularly concerning ingredient sourcing, manufacturing processes, or environmental impact, could necessitate costly adjustments to operations and product formulations.

What Investors Should Do

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Key Dates

• 2024-03-12: Acquisition of Sovos Brands, Inc. — Significantly expands the Meals & Beverages segment with brands like Rao's, indicating a strategic growth initiative.
• 2023-05-30: Sale of Emerald nuts business — Part of a portfolio streamlining strategy, divesting non-core assets.
• 2024-08-26: Sale of Pop Secret popcorn business — Continues the portfolio rationalization, focusing on core strengths.
• 2025-02-24: Sale of noosa yoghurt business — Further portfolio adjustment, removing a business from the Meals & Beverages segment.

Glossary

Consolidated Subsidiaries

Companies that are owned or controlled by the parent company (Campbell's) and whose financial results are combined with the parent's in financial reporting. (Indicates the scope of the financial statements and the extent of Campbell's operations.)

Reportable Segments

Distinct business units within a company that are reported separately in financial statements due to their differing operations and financial results. (Helps investors understand the performance and strategic focus of different parts of Campbell's business, such as Meals & Beverages and Snacks.)

Capital Expenditures

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, technology, or equipment. (Shows Campbell's investment in its infrastructure and future operational capabilities, such as network optimization and wastewater initiatives.)

Commodity Prices

The market price of basic goods or raw materials, such as agricultural products or metals, which are used as inputs in the production process. (Directly impacts Campbell's cost of goods sold and profitability, especially given the company's reliance on various food ingredients.)

Tariffs

Taxes imposed by governments on imported or exported goods, often used to protect domestic industries or as a form of political leverage. (Represents a significant risk factor for Campbell's, potentially increasing costs for imported ingredients or impacting the competitiveness of exported products.)

Year-Over-Year Comparison

The fiscal year ending August 3, 2025, reflects significant portfolio reshaping for Campbell's, marked by the substantial $2.899 billion acquisition of Sovos Brands and the divestiture of multiple businesses including Emerald nuts, Pop Secret, and noosa yoghurt. While specific year-over-year financial comparisons for revenue and margins are not detailed in the provided text, these strategic actions suggest a focus on optimizing the product portfolio and potentially improving future profitability and growth trajectories.

Key Financial Figures

• $2.899 billion — ds) for total purchase consideration of $2.899 billion. For additional information on this acq
• $426 million — our aggregate capital expenditures were $426 million. We expect to spend approximately $420
• $420 million — llion. We expect to spend approximately $420 million for capital projects in 2026. Major cap
• $35 million — iatives. We estimate that approximately $35 million of the capital expenditures anticipated
• $20 million — nt facility, with another approximately $20 million for other network wastewater initiative
• $26 million — ditures made during 2025, approximately $26 million were for compliance with environmental
• $6 million — y, we anticipate spending approximately $6 million for compliance with U.S. environmental

Filing Documents

• cpb-20250803.htm (10-K) — 3063KB
• cpb-832025x10xkxexb10y.htm (EX-10.Y) — 257KB
• cpb-832025x10xkxexb10z.htm (EX-10.Z) — 257KB
• cpb-832024x10xkxexb19.htm (EX-19) — 51KB
• cpb-832025x10xkxexb21.htm (EX-21) — 29KB
• cpb-832025x10xkxexb23.htm (EX-23) — 4KB
• cpb-832025xexb24.htm (EX-24) — 29KB
• cpb-832025x10xkxexb31a.htm (EX-31.A) — 9KB
• cpb-832025x10xkxexb31b.htm (EX-31.B) — 9KB
• cpb-832025x10xkxexb32a.htm (EX-32.A) — 6KB
• cpb-832025x10xkxexb32b.htm (EX-32.B) — 6KB
• cpb-832025exbx97.htm (EX-97) — 24KB
• cpb-20250803_g1.jpg (GRAPHIC) — 165KB
• cpb-20250803_g2.jpg (GRAPHIC) — 105KB
• tcc-logo_vxred0021.jpg (GRAPHIC) — 165KB
• tcc-logo_vxred002a.jpg (GRAPHIC) — 165KB
• 0000016732-25-000112.txt ( ) — 20849KB
• cpb-20250803.xsd (EX-101.SCH) — 97KB
• cpb-20250803_cal.xml (EX-101.CAL) — 179KB
• cpb-20250803_def.xml (EX-101.DEF) — 764KB
• cpb-20250803_lab.xml (EX-101.LAB) — 1319KB
• cpb-20250803_pre.xml (EX-101.PRE) — 1089KB
• cpb-20250803_htm.xml (XML) — 3672KB

Business

Item 1. Business 3

Risk Factors

Item 1A. Risk Factors 6

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 14

Cybersecurity 14

Item 1C. Cybersecurity 14

Properties

Item 2. Properties 16

Legal Proceedings

Item 3. Legal Proceedings 16

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 16 Information about our Executive Officers 17 PART II

Market for Registrant's Capital Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Capital Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities 18

Reserved

Item 6. Reserved 19

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 19

Quantitative and Qualitative Disclosure about Market Risk

Item 7A. Quantitative and Qualitative Disclosure about Market Risk 39

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 40

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 85

Controls and Procedures

Item 9A. Controls and Procedures 85

Other Information

Item 9B. Other Information 85

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 85 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 85

Executive Compensation

Item 11. Executive Compensation 85

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 86

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 86

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 86 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 86

Form 10-K Summary

Item 16. Form 10-K Summary 87 Index to Exhibits 88

Signatures

Signatures 91 2 PART I This Report contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations regarding our future results of operations, economic performance, financial condition and achievements. These forward-looking statements can be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "pursue," "strategy," "target," "will" and similar expressions. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts, and may reflect anticipated cost savings or implementation of our strategic plan. These statements reflect our current plans and expectations and are based on information currently available to us. They rely on several assumptions regarding future events and estimates which could be inaccurate and which are inherently subject to risks and uncertainties. Risks and uncertainties include, but are not limited to, those discussed in "Risk Factors" and in the "Cautionary Factors That May Affect Future Results" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Report. Our consolidated financial statements and the accompanying notes to the consolidated financial statements are presented in "Financial Statements and Supplementary Data" in this Report.

Business

Item 1. Business The Company Unless otherwise stated, the terms "we," "us," "our" and the "company" refer to The Campbell's Company and its consolidated subsidiaries. We are a manufacturer and marketer of high-quality, branded food and beverage products. We organized as a business corporation under the laws of New Jersey on November 23, 1922; however, through predecessor organizations, we trace our heritage in the food business back to 1869. Our principal executive offices are in Camden, New Jersey 08103-1799. On March 12, 2024, we completed the acquisition of Sovos Brands, Inc. (Sovos Brands) for total purchase consideration of $2.899 billion. For additional information on this acquisition, see Note 3 to the Consolidated Financial Statements. On May 30, 2023, we completed the sale of our Emerald nuts business. On August 26, 2024, we completed the sale of our Pop Secret popcorn business. On February 24, 2025, we completed the sale of our noosa yoghurt business. For additional information on the divestitures, see Note 4 to the Consolidated Financial Statements. Our operations, including reportable segments, are described below. Our locations, including manufacturing facilities, within each reporting segment are described in Item 2. Properties. Reportable Segments Our reportable segments are: Meals & Beverages, which consists of soup, simple meals and beverages products in retail and foodservice in the U.S. and Canada. The segment includes the following products: Campbell's condensed and ready-to-serve soups; Swanson broth and stocks; Pacific Foods broth, soups and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; SpaghettiOs pasta; Campbell's gravies, beans and dinner sauces; Swanson canned poultry; V8 juices and beverages; Campbell's tomato juice; and as of March 12, 2024, Rao's pasta sauces, dry pasta, frozen entres, frozen pizza and soups; Michael Angelo's frozen entres and pasta sauces; and noosa yogurts. The noosa yoghurt business was sold o

Risk Factors

Item 1A. Risk Factors In addition to the factors discussed elsewhere in this Report, the following risks and uncertainties could have a material adverse affect on our business, financial condition and results of operations. Although the risks are organized and described separately, many of the risks are interrelated. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations and financial condition. Business and Operational Risks Deterioration of global macroeconomic conditions, including economic recession or slow growth or periods of higher inflation in key markets may adversely affect consumer spending and demand for our products. Global macroeconomic conditions can be uncertain and volatile. We have in the past been, and may continue to be, adversely affected by changes in global macroeconomic conditions, including geopolitical conflicts, global supply chain challenges (including imposed and threatened tariffs by the U.S. and reciprocal tariffs by its trading partners), inflation, consumer spending patterns, recession, rising interest rates, energy availability and costs, labor shortages, pandemics or other local or global health issues. Volatility in financial markets and deterioration of global macroeconomic conditions could impact our business and results of operations in a number of ways, including but not limited to, the following: higher commodity prices and other increased input costs could continue due to supply chain shortages or supply chain disruptions, which may not be sufficiently mitigated; the scope, timing and duration of tariffs on imports and exports and any retaliatory measures on U.S. goods remain uncertain and could impact our business; the failure of third parties on which we rely, including but not limited to, those that supply our packaging, ingredients, equipment and other necessary operating materials, contract manufacturers and independent contractors