Campbell Soup Co. reported a fiscal fourth-quarter sales shortfall and a 36% dividend reduction as margin pressure weighed on profitability, sending shares down 6.65% in premarket trading.
The company posted net sales of $2.137 billion for the quarter ended Sept. 3, 2026, missing the $2.15 billion consensus estimate. Organic net sales declined 1% year-over-year, with the absence of a 53rd week in the prior year contributing roughly 7 percentage points to the decline. Adjusted earnings per share matched expectations at $0.39 but fell 37% from $0.62 in the same period of fiscal 2025. Adjusted EBIT dropped 25% to $242 million, while the adjusted EBIT margin contracted to 11.3% from 13.8% a year earlier. Adjusted gross profit margin narrowed by 190 basis points to 28.6%.
The company announced a $500 million enterprise-wide cost savings program and reduced its quarterly dividend by 36% to $0.25 per share, a move expected to cut annual cash outflows by about $170 million for debt reduction. Net leverage stood at 4.3 times at fiscal year-end, up from 3.6 times in the prior year, though Campbell targets a longer-term goal of approximately 3 times.
Segment performance showed mixed trends. The Meals & Beverages unit posted 3% organic net sales growth, driven by an 11% rise in broth consumption and a 10.7% gain for the Swanson and Pacific brands. Condensed soup consumption declined 1.4%, outperforming the 2.1% category decline and gaining 60 basis points of share. The Rao’s brand grew consumption by roughly 10% in the quarter and 11% for the full fiscal year, with market share expanding to 25.2% and generating two-thirds of category growth. Campbell acquired a 49% stake in La Regina, its manufacturing partner. The Snacks segment reported a 6% organic net sales decline, with dollar consumption down 5.1%.
For fiscal 2027, Campbell forecast net sales to decline 2% to 4% and adjusted EBIT to fall 7% to 12%. Adjusted EPS is projected between $1.65 and $1.80, a 17% to 24% decrease from fiscal 2026. The company expects raw material and packaging inflation of 5% to 6%, alongside double-digit logistics inflation. Productivity improvements are projected to exceed 4% of cost of products sold, with total operating expenses expected to decline slightly, including a $50 million impact from resetting incentive plans.
CEO Mick Beekhuizen called performance "unacceptable" and emphasized the need for decisive action, while CFO Todd Cunfer stated the dividend reset should reduce annual cash outflows by about $170 million for debt reduction.
