CAMPBELL'S Co (CPB)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

This Management's Discussion and Analysis of Financial Condition and Results of Operations is provided as a supplement to, and should be read in conjunction with, the Consolidated Financial Statements and the Notes to the Consolidated Financial Statements in "Part I - Item 1. Financial Statements," and our Form 10-K for the year ended August 3, 2025, including but not limited to "Part I - Item 1A. Risk Factors" and "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations."

Executive Summary

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 operate in a highly competitive industry and experience competition in all of our categories.

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.

Through the fourth quarter of 2025, the snacking and meals and beverages retail business in Latin America was managed under our Snacks segment. Beginning in 2026, the business is managed under our Meals & Beverages segment. Segment results have been adjusted retrospectively to reflect this change.

Recent Developments

On December 8, 2025, we entered into purchase agreements to acquire 49% of the issued and outstanding equity interests of La Regina di San Marzano di Antonio Romano S.p.A. (La Regina SPA) and La Regina Atlantica, LLC (La Regina Atlantica, and together with La Regina SPA, La Regina). La Regina currently produces all of our Rao’s tomato-based pasta sauces. The aggregate consideration for the transaction is $286 million to be paid in two tranches. Subsequent to the end of the third quarter, we acquired the 49% interests in La Regina on May 4, 2026 for $146 million in cash. The remaining 51% of the outstanding equity interests of La Regina are subject to a call option granted to us and a put option granted to La Regina. For additional information on this transaction, see our Form 8-K filed with the U.S. Securities and Exchange Commission on December 9, 2025, and Note 3 to the Consolidated Financial Statements.

Business Trends

Our industry continues to navigate a dynamic operating and regulatory environment driven by commodity cost volatility, supply chain pressures, tariffs and shifting global trade policies, evolving consumer purchasing and spending patterns and other economic uncertainties. On a year-to-date basis, through the third quarter, we have experienced elevated input cost inflation, impacts from tariffs and other supply chain costs. We expect elevated inflationary pressures to persist through the remainder of 2026 and anticipate the need to benefit from continued supply chain productivity, cost savings initiatives and tariff mitigation efforts to offset some of these costs. We expect consumer trends to continue to evolve and our volumes to improve over time; however, shifting consumer behaviors, economic pressures, and the challenges of persistent inflation may continue to negatively impact our volumes throughout 2026. Although we have no operations in the Middle East, the ongoing geopolitical conflicts in that region, including between Iran and the United States, have caused significant disruption to energy supplies and increases in global energy prices, which has heightened inflationary pressures, disrupted global supply chains and adversely impacted consumer spending patterns. As the situation is rapidly changing, we will continue to evaluate the evolving macroeconomic environment and take actions to mitigate the impact on our business, consolidated results of operations and financial condition.

Summary of Results

This Summary of Results provides significant highlights from the discussion and analysis that follows.

•Net sales decreased 4% in the quarter to $2.366 billion primarily due to unfavorable volume/mix and the impact of the noosa divestiture, partially offset by favorable net price realization.

•Gross profit, as a percent of sales, was 27.5% in 2026 compared to 29.4% in the prior-year quarter. The decrease was primarily due to the gross impact of tariffs and the impact of cost inflation and other supply chain costs, partially offset by benefits from supply chain productivity improvements and favorable net price realization.

•Earnings per share were $.41 in 2026, compared to $.22 in the prior-year quarter. The current quarter included expenses of $.09 per share and the prior-year quarter included expenses of $.51 per share from items impacting comparability as discussed below.

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Net Earnings attributable to The Campbell's Company

The following items impacted the comparability of net earnings and net earnings per share:

•We implemented several cost savings initiatives in recent years. In the third quarter of 2026, we recorded Restructuring charges of $9 million and implementation costs and other related costs of $38 million in Other expenses / (income), $12 million in Cost of products sold, $6 million in Administrative expenses, $1 million in Marketing and selling expenses and $1 million in Research and development expenses related to these initiatives. In the third quarter of 2025, we recorded Restructuring charges of $6 million and implementation costs and other related costs of $7 million in Cost of products sold, $7 million in Administrative expenses, and $1 million in Research and development expenses related to these initiatives. Year-to-date in 2026, we recorded Restructuring charges of $15 million and implementation costs and other related costs of $38 million in Other expenses / (income), $28 million in Cost of products sold, $21 million in Administrative expenses, $3 million in Marketing and selling expenses and $2 million in Research and development expenses related to these initiatives. Year-to-date in 2025, we recorded Restructuring charges of $17 million and implementation costs and other related costs of $26 million in Administrative expenses, $25 million in Cost of products sold, $3 million in Research and development expenses and $2 million in Marketing and selling expenses related to these initiatives.

In the second quarter of 2024, we began implementation of an optimization initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network. In the third quarter of 2026, we recognized $2 million in Marketing and selling expenses related to this initiative. In the third quarter of 2025, we recognized $9 million in Marketing and selling expenses and $1 million in Administrative expenses related to this initiative. Year-to-date in 2026, we recognized $20 million in Marketing and selling expenses related to this initiative. Year-to-date in 2025, we recognized $17 million in Marketing and selling expenses and $1 million in Administrative expenses related to this initiative.

In the third quarter of 2026, the total aggregate impact related to the cost savings and optimization initiatives was $69 million ($52 million after tax, or $.17 per share). In the third quarter of 2025, the total aggregate impact related to the cost savings and optimization initiatives was $31 million ($24 million after tax, or $.08 per share). Year-to-date in 2026, the total aggregate impact related to the cost savings and optimization initiatives was $127 million ($96 million after tax, or $.32 per share). Year-to-date in 2025, the total aggregate impact related to the cost savings and optimization initiatives was $91 million ($70 million after tax, or $.23 per share). See Note 8 to the Consolidated Financial Statements and "Restructuring Charges, Cost Savings Initiatives and Other Optimization Initiatives" for additional information;

•In the third quarter of 2026, we recognized gains in Cost of products sold of $6 million ($5 million after tax, or $.02 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges. In the third quarter of 2025, we recognized losses in Cost of products sold of $10 million ($7 million after tax, or $.02 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges. Year-to-date in 2026, we recognized gains in Cost of products sold of $20 million ($15 million after tax, or $.05 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges. Year-to-date in 2025, we recognized gains in Cost of products sold of $8 million ($6 million after tax, or $.02 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges;

•In the third quarter of 2026, we recognized actuarial and curtailment gains in Other expenses / (income) of $30 million ($23 million after tax, or $.08 per share). The actuarial and curtailment gains were related to interim remeasurements of certain pension plans due to plan amendments and activity under our cost savings initiatives. Year-to-date in 2025, we recognized an actuarial loss in Other expenses / (income) of $2 million ($1 million after tax) related to an interim remeasurement of our postretirement plan due to a plan amendment;

•In the second quarter of 2026, we entered into purchase agreements to acquire 49% of the issued and outstanding equity interests of La Regina. Subsequent to the end of the third quarter, the acquisition was completed on May 4, 2026. In the third quarter of 2026, we recognized costs associated with the acquisition in Other expenses / (income) of $2 million ($2 million after tax, or $.01 per share). Year-to-date in 2026, we recognized costs associated with the acquisition in Other expenses / (income) of $4 million ($4 million after tax, or $.01 per share);

•Year-to-date in 2026, we recorded litigation expenses in Administrative expenses of $11 million ($8 million after tax, or $.03 per share) related to the Plum baby food and snacks business (Plum), which was divested on May 3, 2021, and certain other litigation matters. In the third quarter of 2025, we recorded litigation expenses in Administrative expenses of $4 million ($4 million after tax, or $.01 per share) related to Plum and certain other litigation matters. Year-to-date in 2025, we recorded litigation expenses in Administrative expenses of $6 million ($6 million after tax, or $.02 per share) related to Plum and certain other litigation matters;

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•Year-to-date in 2026 and 2025, we recognized insurance recoveries in Administrative expenses of $1 million ($1 million after tax) related to a cybersecurity incident that was identified in the fourth quarter of 2023;

•In the third quarter of 2025, the company performed an interim impairment assessment on the Snyder's of Hanover trademark within the Snacks segment and recognized an impairment charge of $150 million ($112 million after tax, or $.37 per share) on the trademark.

In the second quarter of 2025, we performed an interim impairment assessment on certain salty snacks and cookie trademarks within our Snacks segment, including Tom's, Jays, Kruncher's, O-Ke-Doke, Stella D'oro and Archway, collectively referred to as our "Allied brands," and recognized an impairment charge of $15 million on the trademarks.

In the second quarter of 2025, we performed an interim impairment assessment on the Late July trademark within our Snacks segment and recognized an impairment charge of $11 million on the trademark.

Year-to-date in 2025, the total aggregate impact of the impairment charges was $176 million ($131 million after tax, or $.44 per share).

The charges were included in Other expenses / (income);

•In the third quarter of 2025, we

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

OVERVIEW

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to the consolidated financial statements presented in "Financial Statements and Supplementary Data," as well as the information contained in "Risk Factors."

Unless otherwise stated, the terms "we," "us," "our" and the "company" refer to The Campbell's Company and its consolidated subsidiaries.

Executive Summary

We are a manufacturer and marketer of high-quality, branded food and beverage products. We operate in a highly competitive industry and experience competition in all of our categories.

In 2025, we continued to advance our key strategic initiatives in a dynamic operating environment marked by shifting global trade policies, increased regulatory activity, consumer behavior shifts, commodity cost fluctuations and other global macroeconomic challenges. During 2025, we experienced elevated cost inflation and other supply chain costs, which were mostly offset by improvements in our supply chain productivity and benefits from our cost savings initiatives. In 2026, we expect more significant cost pressures primarily driven by tariff impacts. We plan to reduce some of these costs and impacts over time through cost savings initiatives, inventory management practices, supplier collaboration, alternative sourcing opportunities, continued supply chain productivity initiatives, surgical pricing actions where necessary and other mitigation efforts. We will continue to evaluate the dynamic macroeconomic environment to take action to mitigate the impact on our business, financial condition and results of operations.

Strategy

Our strategy is built around four pillars that position us to achieve Top-Tier Performance for our shareholders, as further discussed below.

•Top Team: We plan to deliver for our people by continuing to cultivate a highly engaged culture to attract, grow and retain top talent. This includes investing in leadership and development programs and elevating commercial capabilities that will help us grow. We are driving organizational engagement, belonging and effectiveness through our

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Employee Value Proposition, Make history with Campbell’s, and modernizing our facilities. We have completed the consolidation of our Snacks offices into Camden, New Jersey. Our single headquarters has helped to foster closer collaboration and enhance decision-making, thereby improving our ability to execute on our business strategy.

•Best Portfolio: We believe in delivering for our consumers through consumer-focused marketing efforts and increased leadership brand support. We have created a Growth Office to support our two divisions and to expand our consumer-led innovations. We believe that we are well-positioned as a transformative category leader with an advantaged portfolio of brands across our Meals & Beverages and Snacks segments. We will support our Best Portfolio priority and accelerate our profitable growth model by growing market share and driving integrated business planning programming throughout the company.

•Winning Execution: We will focus on delivering for our customers by advancing strategic retailer relationships and continuing to optimize our manufacturing and distribution network, with a focus on digitization, logistics and distribution expertise. In September 2024, we announced plans to implement new cost savings initiatives with targeted annual savings of approximately $250 million by the end of 2028. On September 3, 2025, we increased the estimate of annual ongoing savings, once all phases are implemented, to approximately $375 million by the end of 2028. See "Restructuring Charges, Cost Savings Initiatives and Other Optimization Initiatives" for additional information on these initiatives.

•Lasting Impact: Finally, we plan to continue to deliver for our communities with continued progress on our sustainability and community goals and strengthening our connection to the communities in which we operate.

Business Trends

Our industry continues to navigate a dynamic operating and regulatory environment driven by commodity cost volatility, supply chain pressures, tariffs and shifting global trade policies and other economic uncertainties, as well as evolving consumer purchasing and spending patterns.

Our strategy is designed, in part, to capture growing consumer preferences for value and convenience. We expect consumers to continue to seek at-home cooking solutions and stretchable meals. We also believe that consumers are making more intentional decisions in snacking, in terms of health and wellness and seeking indulgences.

Retailers continue to use their buying power and negotiating strength to seek increased promotional programs funded by their suppliers and more favorable terms, including supplier-funded customized products. Any consolidations among retailers would continue to create large and sophisticated customers that may further this trend. Retailers also continue to grow and promote private label brands that compete with branded products, especially on price.

Tariffs on certain ingredients, inputs and imports from many countries, including Canada, Mexico, members of the European Union and the United Kingdom have resulted in increased costs, including on ingredients, packaging, such as tinplate steel used to make cans and other materials used to produce and distribute our products and on finished products that we import. We are continuing to monitor the rapidly evolving tariff and global trade policies and are working with our suppliers to mitigate potential impacts on our business. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as recent legal challenges to the U.S.'s imposition of tariffs, negotiations between the U.S. and affected countries, the responses of other countries or regions, relief that may be granted, availability and cost of alternative sources of supply and demand for our products in affected markets.

In addition, in light of recent actions by the United States Department of Health and Human Services, Food and Drug Administration (FDA) and states, we anticipate continued legislative and regulatory developments with respect to food ingredients, labeling and packaging at the state and federal levels, along with related changes in consumer expectations and behavior. In April 2025, the FDA called on industry to phase out all “petroleum-based synthetic dyes” from the nation’s food supply, and in May 2025, the MAHA Commission published an assessment report discussing factors contributing to chronic childhood disease including diet, environmental exposure, lack of physical activity and healthcare. The MAHA Commission transmitted its strategy report, setting forth certain recommendations for addressing chronic childhood disease, to the President in August 2025 and publicly released it in September 2025. While the effects of all of these proposals remain uncertain at this time, we are continuing to monitor changes to laws and regulations that affect the food industry and evaluate their impact on our business, financial condition and results of operations.

In 2026, we expect significant cost pressures primarily driven by tariff impacts that could negatively impact our business, financial condition and results of operations. We will continue to evaluate the dynamic macroeconomic environment to take action to mitigate such impacts.

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Business Acquisition & Divestitures

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 the Sovos Brands acquisition, see Note 3 to the Consolidated Financial Statements. All references to the acquisition below refer to the Sovos Brands acquisition.

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.

Summary of Results

This Summary of Results provides significant highlights from the discussion and analysis that follows.

There were 53 weeks in 2025 and 52 weeks in 2024 and 2023.

•Net sales increased 6% in 2025 to $10.253 billion primarily due to an 8-point benefit from the acquisition of Sovos Brands and a 2-point benefit from the 53rd week, partially offset by the impact of divestitures, unfavorable volume/mix and lower net price realization.

•Gross profit, as a percent of sales, decreased to 30.4% in 2025 from 30.8% a year ago. The decrease was primarily due to higher cost inflation and other supply chain costs and unfavorable net price realization, partially offset by the benefits from supply chain productivity improvements.

•Earnings per share were $2.01 in 2025, compared to $1.89 a year ago. The current year included expenses of $.97 per share and the prior year included expenses of $1.19 per share from items impacting comparability as discussed below.

Net Earnings attributable to The Campbell's Company - 2025 Compared with 2024

The following items impacted the comparability of net earnings and net earnings per share:

•We implemented several cost savings initiatives in recent years. In 2025, we recorded Restructuring charges of $24 million and implementation costs and other related costs of $41 million in Administrative expenses, $32 million in Cost of products sold, $4 million in Marketing and selling expenses and $3 million in Research and development expenses related to these initiatives. In 2024, we recorded Restructuring charges of $17 million and implementation costs and other related costs of $54 million in Administrative expenses, $26 million in Cost of products sold, $4 million in Marketing and selling expenses and $3 million in Research and development expenses related to these initiatives.

In the second quarter of 2024, we began implementation of an optimization initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network. In 2025, we recognized $20 million in Marketing and selling expenses and $1 million in Administrative expenses related to this initiative. In 2024, we recognized $5 million in Marketing and selling expenses related to this initiative.

In 2025, the total aggregate impact related to the cost savings and optimization initiatives was $125 million ($96 million after tax, or $.32 per share). In 2024, the total aggregate impact related to the cost savings and optimization initiatives was $109 million ($83 million after tax, or $.28 per share). See Note 8 to the Consolidated Financial Statements and "Restructuring Charges, Cost Savings Initiatives and Other Optimization Initiatives" for additional information;

•In 2025, we recognized actuarial losses on our pension and postretirement plans in Other expenses / (income) of $24 million ($18 million after tax, or $.06 per share). In 2024, we recognized actuarial losses in Other expenses / (income) of $33 million ($25 million after tax, or $.08 per share);

•In 2025, we recognized gains in Cost of products sold of $11 million ($8 million after tax, or $.03 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges. In 2024, we recognized losses in Cost of products sold of $22 million ($16 million after tax, or $.05 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges;

•In 2025, we recorded accelerated amortization expense in Other expenses / (income

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