Key Points:
- The Campbell’s Company is collaborating with suppliers in Italy to minimize the impact of tariffs on its Rao’s brand of premium pasta sauce and other products, as stated by EVP and CFO Carrie Anderson during a June 2 earnings call.
- La Regina di San Marzano USA Inc., the importer of Rao’s products from Italy, is one of the key suppliers working with Campbell’s. Campbell’s acquired Rao’s parent company, Sovos Brands, for $2.7 billion in 2024.
- Anderson mentioned that the company is exploring various strategies to mitigate tariffs, including close collaboration with suppliers like La Regina.
Insightful Details:
Campbell’s tariff mitigation plan encompasses inventory management, alternative sourcing, cost optimization, and potential pricing adjustments, according to Anderson. The company anticipates an additional tariff-related cost impact of $0.03 to $0.05 per share on fiscal ’25 adjusted EPS.
The estimated costs are based on the assumption that current tariffs remain in effect, as highlighted by Anderson. President Trump’s 10% baseline duty on EU imports is temporarily paused, with potential reinstatement of reciprocal tariffs in the future.
Moreover, Campbell’s faces challenges in exporting to Canada due to reciprocal tariffs and increased costs from steel and aluminum tariffs imposed by the Trump administration.
Anderson expressed uncertainty regarding the long-term impact of tariffs on the company’s financials, citing the evolving trade landscape as a significant factor.
In a previous statement, Campbell’s CEO Mick Beekhuizen, along with other industry leaders, warned about the operational disruptions and potential price hikes resulting from tariffs, particularly affecting packaging costs and the iconic Campbell’s soup brand.