Will Campbell's PEAK Savings Program Lift Margins by 2028?

The Campbell’s Company CPB is tightening its focus on cost control through its expanded PEAK enterprise savings initiative, which is a cornerstone of its plan to protect profitability amid ongoing tariff and cost pressures.

The PEAK program was unveiled in September 2024 as a $250-million program running through fiscal 2028. At its fourth-quarter fiscal 2025 earnings call, this savings target was lifted by 50% to $375 million following stronger-than-expected early results. As of the end of fiscal 2025, Campbell’s had already delivered roughly $145 million in savings, driven by the accelerated integration of Sovos Brands and efficiencies across its manufacturing and warehouse network.

The PEAK program is designed around four pillars — network optimization, integration synergies, technology and organizational effectiveness, and indirect spend management. These efforts are helping Campbell’s offset inflation and input cost headwinds, especially as tariffs are expected to form nearly 4% of the cost of products sold in fiscal 2026. The company expects to mitigate 60% of that tariff burden through productivity improvements, alternative sourcing and continued execution of PEAK initiatives.

Campbell’s aims to sustain these gains through fiscal 2028 as PEAK scales up, positioning the company to rebuild margin resiliency in an environment marked by structural cost inflation. The company’s guidance for fiscal 2026 includes approximately $70 million of enterprise cost savings and a 5% improvement in cost productivity, signaling continued momentum from PEAK. 

These actions are likely to help the Zacks Rank #3 (Hold) company strengthen its margin structure by the end of fiscal 2028, providing solid flexibility to invest in brand support and innovation while cushioning the effects of a volatile cost landscape. While CPB shares have dipped 3.7% in the past three months, it has outperformed the industry’s decline of 5.9%.

Better-Ranked Consumer Staple Stocks to Consider

United Natural Foods UNFI engages in the distribution of natural, organic, specialty, produce, and conventional grocery and non-food products. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for United Natural’s current fiscal-year sales and earnings indicates growth of 2.4% and 167.6%, respectively, from the prior-year reported levels. UNFI delivered a trailing four-quarter earnings surprise of 416.2%, on average.

Grocery Outlet Holding Corp. GO operates as a retailer of consumables and fresh products. It has a Zacks Rank #2 (Buy) at present. GO delivered a trailing four-quarter earnings surprise of 28.2%, on average.

The Zacks Consensus Estimate for Grocery Outlet’s current fiscal-year sales and earnings indicates growth of 8.4% and 1.3%, respectively, from the prior-year reported levels.

PepsiCo PEP engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods. It carries a Zacks Rank #2 at present. PEP delivered a trailing four-quarter earnings surprise of 1.1%, on average. 

The Zacks Consensus Estimate for PepsiCo’s current fiscal-year sales implies an increase of 1.6% from the prior-year reported level.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research