Key facts
- Campbell's forecasts annual net sales to fall between 2% and 4% by fiscal 2027.
- The company cut its quarterly dividend to 25 cents from 39 cents.
- Campbell's expects fiscal 2027 adjusted profit per share of $2.17.
- Fourth-quarter net sales fell 8% to $2.1 billion.
- Campbell's anticipates cost savings of $500 million by 2030.
Campbell's issued annual forecasts below estimates on Thursday, grappling with weak demand for its pricier snacks and pantry condiments. The soup maker is cutting its quarterly dividend by more than a third as it looks to improve performance.
Lower-income consumers are shifting toward cheaper value brands and store-label products, pressuring sales at companies including Campbell's that have raised prices in recent years to protect their margins.
The company forecasts cost savings of $500 million by 2030. It is also cutting its quarterly dividend to 25 cents for the fourth quarter from 39 cents previously to accelerate its debt reduction efforts.
"Our performance is not where it needs to be and we are taking decisive action to improve it," CEO Mick Beekhuizen said.
Campbell's expects fiscal 2027 net sales to fall between 2% and 4%, compared with analysts' estimate of a 0.8% drop, according to data compiled by LSEG. Net sales fell 8% to $2.1 billion in the fourth quarter, steeper than analysts' average estimate of a 7.6% drop. However, the company expects fiscal 2027 adjusted profit per share of $2.17, compared with analysts' estimate of $1.86 per share. The forecast reflects a volatile environment with elevated inflation, but sees benefits that are expected to support margins, Campbell's said.