Company targets $500 million in savings and forecasts further sales and profit declines in fiscal 2027.
The Campbell’s Company is cutting its dividend and accelerating cost reductions after inflation, supply-chain expenses and continued weakness in its snacks business contributed to a fiscal fourth-quarter loss.
The Camden-based packaged-food company reported net sales of $2.14 billion for the quarter ended Aug. 2, down 8% from $2.32 billion a year earlier. Organic sales, which exclude acquisitions, divestitures and other factors, decreased 1%.
Campbell’s reported a diluted loss of 23 cents per share, compared with earnings of 48 cents per share in the prior-year quarter. Adjusted earnings fell 37% to 39 cents per share, matching analysts’ expectations.
The year-over-year comparisons were affected by an additional week in fiscal 2025, which Campbell’s estimated added 7% to prior-year quarterly sales and 6 cents per share to adjusted earnings.
Profitability weakened as inflation, tariffs and other supply-chain costs outpaced productivity improvements. Adjusted gross profit declined 14% to $611 million, while adjusted gross margin contracted 190 basis points to 28.6%.
The company also recorded a combined $117 million impairment charge against its Cape Cod and Kettle Brand trademarks.
Campbell’s Meals & Beverages division provided the quarter’s primary source of sales growth. Organic sales increased 3%, although that included an estimated 2-percentage-point benefit related to a prior-year enterprise-resource-planning implementation at Sovos Brands. Reported segment sales declined 4% to $1.19 billion, and operating earnings fell 12% to $181 million.
U.S. soup sales declined 8%, largely because of the additional week in the prior-year period.
Conditions were considerably weaker in Snacks, where reported sales fell 12% to $950 million and organic sales decreased 6%. The company attributed the organic decline primarily to lower volume in its salty-snack portfolio and reduced sales from partner brands and contract manufacturing. Snacks operating earnings dropped 34% to $101 million.
“Our performance is not where it needs to be, and we are taking decisive action to improve it,” President and CEO Mick Beekhuizen said.
Campbell’s will begin a new companywide savings program in fiscal 2027 targeting $500 million in annualized savings by fiscal 2030. The initiative incorporates unfinished work from an earlier $375 million program, an overhead-reduction plan and broader changes to direct and indirect spending.
The company said plant closures and workforce reductions are already underway. Campbell’s generated approximately $25 million in fourth-quarter savings, bringing savings under its previous program to about $225 million.
Campbell’s board also reduced the quarterly dividend to 25 cents per share from 39 cents, a 36% cut intended to accelerate debt reduction. The new dividend, equivalent to $1 annually, is payable Nov. 2 to shareholders of record Oct. 1.
The company expects the pressure to continue in fiscal 2027, forecasting reported and organic sales declines of 2% to 4%. Adjusted earnings are projected at $1.65 to $1.80 per share, down 17% to 24% from fiscal 2026.
The outlook assumes another year of elevated inflation and incorporates Campbell’s current understanding of tariffs. It does not account for any new tariffs or changes to existing rates. The recently completed La Regina acquisition is expected to provide a modest sales benefit but have no material effect on adjusted earnings.
For the full fiscal year, Campbell’s sales declined 5% to $9.74 billion, while organic sales fell 2%. Adjusted earnings decreased 27% to $2.17 per share, and operating cash flow declined to $1 billion from $1.1 billion.
Campbell’s shares closed Thursday at $22.13, down nearly 7% following the report.