The Campbell's Company CPB is likely to register top-line growth when it reports first-quarter fiscal 2025 earnings on Dec. 4. The Zacks Consensus Estimate for revenues is pegged at $2.79 billion, implying a 10.9% increase from the prior-year quarter’s reported figure. The consensus mark for earnings has remained unchanged in the past 30 days at 87 cents per share, though it indicates a 4.4% decline from the figure reported in the year-ago quarter. CPB has a trailing four-quarter earnings surprise of 4.3%, on average.

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Factors Likely to Influence CPB’s Upcoming Results

Campbell’s consistent execution has been noteworthy, with robust and sustained performance across the supply chain, successful innovations, effective marketing programs and share trend improvements. The company has been focused on prioritizing execution, innovation and strong collaboration with retail partners to stay relevant and succeed by delivering both quality and value. Despite a dynamic operating landscape, improving trends in market share and volumes bode well for the quarter under review. 

Campbell’s Meals & Beverages division continues to be a bright spot, showing 1% growth in organic net sales during the fourth quarter of fiscal 2024, resulting from the company’s products and the successful integration of Sovos Brands. Consumer demand remained solid across the portfolio, with core brands like Rao's and Prego performing well. These results signal the division's strength and potential to contribute meaningfully to the company’s growth. Our model suggests 0.5% organic sales growth in the Meals & Beverages segment during the first quarter of fiscal 2025.

However, Campbell’s Snacks business faced notable challenges in the fourth quarter due to competitive pressures in the salty snacks segment. This pressure stemmed from new market entrants in premium categories, such as organic tortilla chips and kettle-style potato chips. In addition to market competition, there was a 1% drag on performance due to headwinds from partner and contract brands. While CPB remains committed to growing its premium snack brands, including Kettle and better-for-you offerings, progress has been slower than expected. We expect segment organic sales to dip 0.7% in the first quarter of fiscal 2025.

Campbell's continues to navigate a challenging consumer environment marked by fragile consumer confidence. Inflationary pressures and economic uncertainty continue to weigh on consumer spending patterns, leading to mixed in-market performance. While Campbell’s is optimistic that consumer confidence will stabilize, the company remains cautious in its fiscal 2025 guidance, reflecting the ongoing uncertainty surrounding consumer behavior and its impact on future sales.

Cost inflation is another area of concern, though savings from the company’s multi-year cost-saving program have been offering respite.

Earnings Whispers for CPB

Our proven model predicts an earnings beat for Campbell's this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.

Campbell's carries a Zacks Rank #3 and has an Earnings ESP of +0.05%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are some other companies worth considering, as our model shows that these also have the correct combination to beat on earnings this time.

Casey's General Stores CASY currently has an Earnings ESP of +1.50% and a Zacks Rank of 3. The Zacks Consensus Estimate for CASY’s quarterly revenues is pegged at $4.01 billion, which implies a 1.4% decline from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

CASY’s bottom line is anticipated to remain flat year over year when it reports second-quarter fiscal 2025 results. The consensus estimate for earnings is pegged at $4.24 per share. CASY has a trailing four-quarter earnings surprise of 15.8%, on average.

Dollar Tree DLTR has an Earnings ESP of +2.80% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for DLTR’s quarterly revenues is pegged at $7.45 billion, which indicates 1.9% growth from the figure reported in the prior-year quarter.

The consensus estimate for Dollar Tree’s quarterly earnings has risen by 1 cent over the past 30 days to $1.07 per share. The figure calls for an increase of 10.3% from the year-ago quarter’s number. DLTR delivered an average negative earnings surprise of 10.9% in the trailing four quarters.

The Simply Good Foods Company SMPL currently has an Earnings ESP of +3.87% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter fiscal 2025 earnings per share is pegged at 45 cents, which implies a 4.7% increase year over year.

The Zacks Consensus Estimate for The Simply Good Foods Company’s quarterly revenues is pegged at $347.3 million, which indicates growth of 12.5% from the figure reported in the prior-year quarter. SMPL has a trailing four-quarter earnings surprise of 5.3%, on average.

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Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report

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