Campbell's Company (CPB) faces a pivotal week as it prepares to exit the S&P 500 and report fiscal third-quarter results that analysts expect to show declining sales and earnings. The stock gained 2.7% last week, outperforming a sharply lower market, but the upcoming index change and weak earnings outlook could pressure shares.
Index Change Details
S&P Dow Jones Indices announced late Friday that Campbell's will be removed from the S&P 500 before the open on June 22 and added to the S&P SmallCap 600 as part of a quarterly rebalance to maintain market-cap targets. Marvell Technology and Flex will join the S&P 500, while Campbell's and Pool Corp are dropped. Passive funds tracking the S&P 500 typically sell stocks being removed, potentially creating selling pressure around the effective date.
Market Context
Last week, CPB closed at $21.68 on Friday, up from $21.11 on May 29, according to Investing.com. This advance came as the S&P 500 fell 2.6%, the Dow declined 0.3%, and the Nasdaq dropped 4.7%. Consumer staples led S&P 500 sectors on Friday as investors rotated into defensive names amid a tech selloff triggered by stronger-than-expected U.S. jobs data, which reignited concerns about Federal Reserve policy. "The dam just broke today" after nine consecutive weekly gains for stocks, said Ryan Detrick, strategist at Carson Group.
Earnings Preview
Campbell's will release fiscal third-quarter results for the period ended May 3 on Monday, June 8, before the market open. The company will issue a press release and pre-recorded management remarks at 7:15 a.m. ET, followed by a live Q&A with CEO Mick Beekhuizen and CFO Todd Cunfer at 9:00 a.m. ET. Analysts surveyed by Zacks expect revenue of $2.39 billion, down 3.6% year-over-year, and adjusted earnings per share of $0.48, a decline of 34.3%.
Recent Performance and Outlook
In March, Campbell's reported fiscal second-quarter net sales fell 5% to $2.6 billion, with adjusted EPS dropping 31% to $0.51. CEO Beekhuizen said results "fell short of our expectations," citing weak Snacks sales and shipment delays due to storms. The company subsequently lowered its full-year fiscal 2026 guidance, now forecasting organic net sales to decline 1% to 2% and adjusted EPS between $2.15 and $2.25, down from the prior range of $2.40 to $2.55.
Campbell's faces intense competition as price-conscious shoppers seek bargains, but it is not alone. Peers General Mills and Kraft Heinz both traded higher on Friday, with General Mills up 2.95% and Kraft Heinz gaining 0.49%. If Campbell's Snacks segment improves or promotional efforts boost volumes without eroding margins, it could cushion the impact of the S&P 500 exit. However, a disappointing report would coincide with index fund rebalancing, exposing CPB to selling pressure from both earnings disappointment and mechanical index flows.
Analyst Sentiment
Wall Street remains skeptical. Over the past three months, 18 analyst ratings have been issued: 12 holds and six sells, with no buy recommendations. The average 12-month price target is $20.88, below Friday's closing price of $21.68. Trading volume on Friday reached 13.46 million shares, well above the average of 7.40 million.
