Campbell's slashed its quarterly dividend by over a third and forecast annual profit and sales below analyst estimates, sending shares down 7 percent on Sept. 3. The company cited soft demand for its premium snack products as a primary factor.
For fiscal 2027, Campbell's expects net sales to fall between 2 percent and 4 percent versus analysts' consensus estimate of a 0.8 percent decline. Adjusted earnings per share are forecast at $1.65 to $1.80, below the $1.86 consensus.
CEO Mick Beekhuizen said on the call, "Our results remain unacceptable." He signaled the company will "address reality head-on" with price adjustments in select categories to reflect commodity cost changes.
Barclays analyst Andrew Lazar called the approach "clearly a much more aggressive self-help stance." Campbell's plans to cut $500 million in costs by fiscal 2030 through plant closures and workforce reductions.
The dividend cut—a rare move for a company long known for shareholder payouts—reflects the depth of Campbell's margin crisis. Lower-income consumers are shifting to cheaper value brands and private-label products, forcing Campbell's to choose between volume and profitability.
CFO Todd Cunfer detailed the pricing actions: Campbell's implemented average price increases of 4 percent to 5 percent across roughly 60 percent of its product portfolio. Benefits are expected to begin in the second quarter, though sales volume will be hit.
In the fourth quarter, Campbell's reported net sales of $2.14 billion, missing the $2.15 billion consensus. Adjusted earnings per share hit 39 cents, in line with expectations. Snacks volumes fell 6 percent despite a 1 percent price increase. The meals and beverages segment posted a 3 percent volume gain with flat pricing.
The company faces a dual squeeze: commodity inflation driven by geopolitical tensions and trade disruptions is lifting input costs, while consumer price resistance is hardening. Campbell's is betting that modest price increases stick in select categories, but the snacks miss suggests that wager is failing.
