By Elias Schisgall


A weak second-quarter showing for Campbell's weighed on other packaged food stocks after the soup-and-snack company said soft consumer demand and an increasingly competitive market for salty snacks hurt sales.

Beyond Campbell's, which fell nearly 8% to $22.75 a share in midday Wednesday trading, Slim Jim maker Conagra Brands was down 6.2% to $16.96. Cereal maker General Mills fell 3.3% to $40.87. Mondelez International and Kraft Heinz were both down around 2%, and McCormick & Co. fell 5%.

Campbell's on Wednesday said that its snack business was hit by increasing competition in the salty snacks category. The company plans to prioritize promotions to stabilize the business rather than lowering prices.

Campbell's said it will consider price cuts after PepsiCo said last month that it would reduce prices by as much as 15% on products including Cheeto's and Lay's potato chips, with the company citing an influx of customer complaints.

Target has said it would reduce prices on more than 3,000 items, including some pantry staples.

Inflation and tariffs have caused many shoppers to increasingly seek the most value from their purchases. A spike in fuel prices following the war in Iran has also increased inflation fears.

General Mills cut its outlook last month, with Chief Executive Jeff Harmening warning about low- and middle-income consumer stress. "Cost of living and housing pressures are reshaping spending patterns, and value is a core expectation that is here to stay," he said.

In the second quarter, Campbell reported a 5% decrease in revenue to $2.56 billion, short of Wall Street estimates of $2.61 billion. Campbell's now expects organic net sales will be down between 1% and 2% for the year.

January weather was also a drag on net sales, D.A. Davidson analyst Brian Holland wrote in a note, adding that it doesn't fully account for the decline in profit. "Net, slowing demand and rising costs are not an ideal combination," Holland wrote.


Write to Elias Schisgall at elias.schisgall@wsj.com


(END) Dow Jones Newswires

03-11-26 1234ET