Campbell Soup Co. reported a fiscal fourth-quarter sales shortfall and a 36% dividend reduction on Thursday, as adjusted earnings per share matched expectations but margins contracted sharply and leverage increased.
Net sales for the quarter ended September 3, 2026, totaled $2.137 billion, missing analyst forecasts of $2.15 billion and declining 8% year-over-year. Organic net sales fell 1%. Adjusted earnings per share were $0.39, in line with projections but down 37% from $0.62 in the same period last year. Adjusted EBIT dropped 25% to $242 million, while the adjusted EBIT margin narrowed to 11.3% from 13.8% a year earlier. The adjusted gross profit margin contracted by 190 basis points to 28.6%.
The company’s stock fell 6.65% in premarket trading to $22.20, extending a decline from a 52-week high of $34.17. Campbell’s dividend yield stands at 7.2%. Net leverage at fiscal year-end rose to 4.3 times, up from 3.6 times in the prior year, with a long-term target of around 3 times.
Chief Executive Officer Mick Beekhuizen described performance as "unacceptable" and said the company is taking "decisive action" to transform Campbell Soup. "Our top priority is to get close to the consumer in everything we do," he stated. Chief Financial Officer Todd Cunfer noted the dividend reduction would reduce annual cash outflows by about $170 million, primarily for debt reduction.
Segment performance showed mixed trends. Meals & Beverages organic net sales grew 3% in the quarter, with dollar consumption up 0.8%. Swanson and Pacific broth consumption rose 10.7%, while condensed soup consumption declined 1.4%, outperforming the category’s 2.1% decline. Rao’s brand achieved nearly 10% consumption growth in the quarter and 11% for the full fiscal year, with dollar share expanding by 170 basis points to 25.2%. The brand’s household penetration reached 18.9%, compared with Prego’s 32%. Snacks organic net sales fell 6%, with dollar consumption down 5.1% and volume/mix deteriorating by 6%. Goldfish returned to positive growth, up 1.6%, with e-commerce sales rising in double digits.
Campbell Soup launched a $500 million enterprise-wide cost savings program and expects productivity improvements to exceed 4% of cost of products sold in fiscal 2027. Total operating expenses are projected to decline slightly, aided by a $50 million reduction from resetting incentive plans.
For fiscal 2027, the company guided to a 2% to 4% decline in net sales and a 7% to 12% drop in adjusted EBIT. Adjusted EPS is expected to range between $1.65 and $1.80, a 17% to 24% decrease from fiscal 2026. Raw material and packaging inflation is forecast at 5% to 6%, with double-digit logistics inflation. Enterprise-wide cost savings are projected to exceed $100 million.
