Last month, Lamb Weston (NYSE: LW) became a cautionary tale. On March 22, 2026, the potato products manufacturer was removed from the S&P 500 and moved to the S&P SmallCap 600, a demotion driven by years of stock declines, soft restaurant traffic, and a market capitalization that no longer belonged in the same room as the index’s other 499 members. It was a slow-motion fall that investors could see coming.
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That’s how these things go. S&P 500 demotions rarely happen overnight. They happen after months of guidance cuts, volume pressure, and share price erosion that quietly pull a company below the floor.
The Lamb Weston story matters not because of what it means for Lamb Weston, but because another S&P 500 consumer name is tracking a disturbingly similar path right now.
Campbell’s (NASDAQ: CPB) joined the S&P 500 at its founding in 1957, one of roughly 50 original members still on the index today. That kind of longevity feels permanent right up until the moment it isn’t.
In March, Campbell’s reported fiscal second-quarter 2026 adjusted earnings per share (EPS) of $0.51, missing the $0.57 estimate by 11%, while net sales dropped 5% to $2.56 billion. Management cut full-year guidance to adjusted EPS of $2.15 to $2.25 — down from as high as $2.55 at the start of the fiscal year — and projected organic net sales to decline 1% to 2%. Tariff exposure is compressing gross margins by an estimated 230 basis points.
The snacks division, which Campbell’s acquired Sovos Brands a couple of years ago to build out, is struggling. Snacks’ operating earnings fell to $67 million on $914 million in revenue, a 7.3% operating margin that is well below what the company needs to justify that acquisition.
The stock price has fallen more than 40% over the past 12 months, putting its market cap at roughly $6.9 billion, the second-lowest in the S&P 500. For context, four companies were removed from the S&P 500 in the same rebalance that added new members just weeks before Campbell’s guidance cut, specifically because they ranked among the index’s smallest constituents.
Campbell’s is now in that conversation. A company that has paid a dividend every year since 1902 doesn’t need to be loved by investors to stay in the index, but it does need to stop shrinking.