What are the implications of the 53‑week fiscal year and the additional week in Q4 on the comparability of revenue and earnings metrics, and how should we adjust our valuation models?

Impact on comparability

Because fiscal 2025 ran 53 weeks (the extra week landed in Q4), raw top‑line and bottom‑line numbers for the quarter and the year are not apples‑to‑apples with the 52‑week baseline used in fiscal 2024. The additional 7‑day period inflates revenue, volume and profit figures simply by extending the reporting horizon, not by improving underlying operating performance. Consequently, the quarter‑over‑quarter growth rates reported by Campbell’s will be overstated if taken at face value, and the FY‑2025 “full‑year” totals will embed roughly 1.3 % (7/365) of “extra” activity that the prior year did not have. Analysts should therefore strip out the incremental week when benchmarking year‑over‑year (YoY) growth or when feeding the data into forecasting models.

Adjusting valuation models

1. Normalize the numbers – Reduce Q4‑2025 revenue and EBITDA by ~1.3 % (or by the exact dollar amount disclosed for the extra week, if available) to create a 52‑week comparable. Apply the same adjustment to net income and EPS. This yields a clean YoY growth metric for the core business and a more reliable base for trend analysis.

2. Re‑estimate forward metrics – Use the normalized FY‑2025 figures as the starting point for your multi‑year DCF or relative‑valuation multiples. When projecting FY‑2026, keep the calendar‑year length constant (i.e., assume a 52‑week fiscal year) so that the forecasted earnings per share are not biased upward by the one‑off extra week.

3. Sensitivity checks – Run a scenario where the extra week is treated as a “one‑off boost” to Q4 cash flow (e.g., adding the incremental contribution margin directly to FY‑2025 free cash flow) and observe the effect on implied EV/EBITDA or price‑to‑earnings multiples. The spread between the base‑case (normalized) and the “full‑week” scenario gives you a range for valuation and helps size the risk premium.

Trading implications

The market is likely pricing the headline FY‑2025 growth as slightly better than the underlying operating trend, creating a modest overvaluation risk. If the stock is trading near historical EV/EBITDA or P/E multiples, a 1‑2 % downward normalization could push the valuation back toward its longer‑term mean, suggesting a short‑to‑medium‑term pull‑back or a buying opportunity only after the price adjusts for the “extra‑week” effect. Technically, CPB’s price has been holding just above its 20‑day EMA with modest upside momentum; a breach below the 50‑day EMA coupled with the earnings normalization could trigger a corrective move. Conversely, confirmation of underlying growth (e.g., same‑store sales acceleration) despite the adjustment would support a bullish stance and could justify a position on a breakout above recent resistance levels.