Campbell Soup Company (CPB Quick QuoteCPB - Free Report) is marking a significant shift in its strategy. During Tuesday’s Investor Day, the company revealed its plans to accelerate growth following a transformative period that began in 2019. This transformation set the stage for renewed growth efforts, with ambitious targets and a redefined mission aimed at setting new standards in the food industry.

A Look Back: How Campbell Soup Transformed

Since 2019, Campbell Soup has undergone a significant overhaul. It is focused on core categories and strategic geographies to drive growth in net sales and earnings. A key highlight has been the acquisition of Sovos Brands, which strengthened the company’s product portfolio.

CPB also made substantial efforts to rebuild its foundation by assembling a strong leadership team, improving company culture and optimizing its supply chain. These changes have enhanced internal operations and also helped the company earn investor trust through consistent financial performance.

Unpacking Growth Targets for CPB’s Success

Looking forward, Campbell Soup aims to leverage its revitalized portfolio and strong team to set new performance benchmarks in the food industry. Their next phase includes a comprehensive long-term growth strategy with specific targets to boost shareholders’ value. The company is targeting organic net sales growth of 2-3%, with higher growth expected in the Snacks division and a more modest increase in Meals & Beverages.

Management also aims for adjusted earnings before interest and taxes (EBIT) growth of 4-6%, supported by strategic cost-saving measures and reinvestments. For adjusted earnings per share (EPS), CPB is aiming for 7-9% growth through the fiscal 2027. These targets provide a clear path for enhancing revenues and profitability, with robust internal cash flow that offers additional opportunities for boosting shareholders’ value.

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Campbell Soup Rebrands: What the New Identity Means

As part of its evolution, CPB plans to rebrand as "The Campbell’s Company," pending shareholders’ approval in November. This rebranding reflects its commitment to setting industry benchmarks through a refreshed mission. The company's focus will be on cultivating a highly engaged and inclusive culture and developing leadership at all levels. They aim to drive growth with a strong portfolio of 16 leading brands across Snacks and Meals & Beverages. Leveraging an advanced supply chain and innovation capabilities will be central to their strategy, as will achieving solid revenues and earnings growth. Also, Campbell Soup is committed to making a lasting impact by enhancing sustainability efforts and positively contributing to communities.

CPB’s Growth Path: Snacks and Meals & Beverages

Campbell Soup is set for significant long-term growth and margin expansion across its Snacks division. The company’s strategy focuses on leveraging its elevated portfolio of leading brands, a strong innovation pipeline and an efficient direct store delivery model to enhance scalability. By concentrating on fast-growing and advantageous snack categories and maximizing its distribution network, the company aims to drive margin expansion and make sustainable investments for future growth. This strategic approach positions it to benefit from ongoing trends and momentum in the snacking sector.

In the Meals & Beverages division, CPB is also on a growth trajectory. The acquisition of Sovos Brands bolstered this portfolio, aligning it with consumer demands for quality and convenience. This strategic acquisition sets the stage for consistent and profitable growth, providing a solid foundation for expanding the company’s presence in the Meals & Beverages market.

Key Factors for Investors to Watch in CPB Stock

Campbell Soup is at a pivotal moment with its new strategic vision and rebranding efforts. Investors should monitor its ability to execute growth targets and effectively leverage revamped portfolio and operational improvements. The ambitious long-term goals, along with a strong focus on sustainability and community impact, signal a positive direction. Given the transitional phase and the inherent risks of rebranding, maintaining a cautious approach while observing the Zacks Rank #3 (Hold) company's progress and performance relative to its strategic objectives is advisable.

CPB’s shares have gained 19.5% in the past three months compared with the industry's growth of 8.9%.

Some Solid Staple Stocks

Here, we have highlighted three better-ranked food stocks, namely, The Chef's Warehouse (CHEF Quick QuoteCHEF - Free Report) , Ollie's Bargain Outlet (OLLI Quick QuoteOLLI - Free Report) and Flowers Foods (FLO Quick QuoteFLO - Free Report) .

The Chef’s Warehouse, which engages in the distribution of specialty food products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CHEF has a trailing four-quarter earnings surprise of 33.7%, on average. The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal year sales and earnings each indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.

Ollie's Bargain, the extreme-value retailer of brand-name merchandise, carries a Zacks Rank #2 (Buy). OLLI has a trailing four-quarter earnings surprise of 7.9%, on average.

The Zacks Consensus Estimated figure for Ollie's Bargain’s current financial-year sales and earnings each indicates a rise of around 8.7% and 12.7%, respectively, from the year-earlier figures.

Flowers Foods, one of the largest producers of packaged bakery foods in the United States, currently carries a Zacks Rank #2. FLO has a trailing four-quarter earnings surprise of 1.9%, on average.

The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales and earnings each implies growth of around 1% and 4.2%, respectively, from the year-ago reported numbers.