Campbell’s posts one of worst quarters in years: revenues fell 5%, organic sales dropped 3%

One market analyst put it bluntly on air this week: “Yesterday, Campbell’s reported one of the worst quarters I’ve seen in ages. It was awful. Across the board, revenues fell 5%, organic sales dropped 3%.” That’s not hyperbole. The numbers back it up.

Campbell’s (NASDAQ:CPB | CPB Price Prediction) reported its Q2 FY2026 results on March 11, 2026, and the damage was widespread. Revenue came in at $2.564 billion, down 4.5% year-over-year, missing the consensus estimate of $2.611 billion. EPS landed at $0.51 against a $0.57 estimate, a miss of more than 10%. Gross profit dropped 12.45% year-over-year, and operating income fell 22.88%.

The Snacks Collapse

The analyst described the snack business as “unbelievably bad.” That tracks. The Snacks segment posted revenue of $914 million, down 6% year-over-year, while operating earnings plummeted 39%. Chips and pretzels led the decline, compounded by supply constraints in fresh bakery. This isn’t a one-quarter blip. It’s a business in need of a real fix.

CEO Mick Beekhuizen acknowledged the problem: “To stabilize Snacks, we are taking decisive action, focused on sharpening our value, new product innovation and in-market execution.” The analyst’s read on management’s tone was less generous, calling their confidence on the conference call “agonizing to listen to.”

Rao’s Bright Spot, Prego Problem

There is one genuine win buried in the report. The Rao’s brand surpassed $1 billion in trailing twelve-month net sales. That’s a real milestone for a premium brand Campbell’s bet heavily on. But as the analyst noted, weakness in Prego effectively canceled out the Rao’s momentum. The Meals & Beverages segment still posted revenue of $1.650 billion, down 4% year-over-year, with U.S. soup sales down 4% as well.

Dividend Under the Microscope

With the stock hitting a 17-year low, investors are asking whether Campbell’s can sustain its dividend. At $21.65 per share today, the $0.39 quarterly dividend translates to a yield north of 7%. That’s not a gift. That’s a warning sign. Management cut full-year EPS guidance to $2.15 to $2.25, down sharply from the prior range of $2.40 to $2.55. With the annualized dividend at $1.56 per share, coverage exists on paper, but the trajectory is uncomfortable.

General Mills: A Slightly Less Bad Story

General Mills (NYSE:GIS) is navigating similar headwinds but with better execution. The analyst noted GIS told a “slightly better story” at the CAGNY conference. GIS stock sits at $39.40, down 14% year-to-date, versus Campbell’s 21% drop year-to-date. Neither chart is pretty, but Campbell’s is in a category of its own right now.

The packaged food sector is grinding through cost inflation, tariff pressure, and a consumer trading down or tuning out legacy brands entirely. Campbell’s needed a clean quarter to rebuild confidence. Instead, it delivered the opposite, and the stock is now trading at levels that raise questions about whether the business model itself needs radical rethinking.