Campbell’s said on Thursday it has closed plants, cut jobs and plannedmore price increases on select products as the soup-and-snacks maker seeks to offset rising costs and restore profitability.
Its shares were down about 11 per cent and on track for their worst day since 2018 as the company also cut its dividend by a third and forecast annual sales and profit below estimates.
“Our results remain unacceptable,” CEO Mick Beekhuizen said, adding that Campbell’s will be “addressing reality head-on.”
Consumer goods companies have increasingly faced resistance from budget-conscious shoppers, particularly lower-income households that have gravitated toward cheaper, private-label and value brands.
Despite this, Campbell’s has raised prices in recent years to protect its margins against risings costs of raw-materials, logistics and investments behind soup and sauce launches and holiday merchandising programs.
The company has implemented average price increases of four to five per cent across roughly 60 per cent of its portfolio, with benefits expected to begin flowing through in the second quarter, even as sales take a hit, CFO Todd Cunfer said on a call with analysts.
“(Campbell’s) is clearly taking a much more aggressive self-help stance,” Barclays analyst Andrew Lazar said.
The company said it plans to generate about US$500 million in cost savings by fiscal 2030.
“The brand needs innovation, packaging, and price-pack architecture that can change perceptions and give consumers a reason to choose it beyond nostalgia,” eMarketer analyst Suzy Davidkhanian said.
Campbell’s expects fiscal 2027 net sales to decline two to four per cent, compared with analysts’ expectations for a 0.8 per cent drop, according to data compiled by LSEG. It forecast adjusted earnings per share of US$1.65 to US$1.80, below estimates of US$1.86.
Net sales fell eight per cent to US$2.14 billion in the fourth quarter, sightly missing estimates of US$2.15 billion, while adjusted earnings per share of 39 cents were in line with expectations.
Volumes in the company’s snacks segment fell six per cent, while prices rose one per cent. For its meals and beverages segment, where prices remained the same, volumes rose three per cent.
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Reporting by Koyena Das in Bengaluru and Alexander Marrow in London; Editing by Pooja Desai and Devika Syamnath
