Campbell Soup Co. posted fourth-quarter results that fell short of revenue forecasts, sending shares down 6.65% in premarket trading on Thursday. Adjusted earnings per share of $0.39 matched Wall Street expectations, though revenue of $2.1 billion missed the $2.15 billion consensus by 2.3%, or roughly $50 million.
Organic net sales declined 1% year-over-year, with the Meals and Beverages segment rising 3% on a 0.8% consumption increase and a $30 million benefit from prior-year timing shifts. Within that division, snacks organic net sales fell 6%, while consumption dropped 5.1%. Adjusted gross margin contracted by 190 basis points to 28.6%, driven by nearly 6% cost inflation across raw materials, packaging, and logistics. Adjusted EBIT declined 25% for the quarter, while full-year operating cash flow totaled $1 billion, down nearly $100 million from the prior year. The company’s net leverage ratio stood at 4.3 times at year-end.
The board reduced the quarterly dividend by 36% to $0.25 per share, a move aimed at preserving cash and accelerating debt reduction. The dividend now yields 7.2%, despite the cut, and is expected to save about $170 million annually in cash outflows. Campbell has maintained dividend payments for 56 consecutive years, according to InvestingPro data.
For fiscal 2027, Campbell guided for a 2% to 4% decline in net sales, adjusted EPS of $1.65 to $1.80 (down 17% to 24% from fiscal 2026), and a 7% to 12% drop in adjusted EBIT. The company projects raw material and packaging inflation of 5% to 6%, with logistics inflation in the double digits. Net pricing is expected to provide a low-single-digit benefit, while productivity gains are forecast to exceed 4%. A new $500 million cost-reduction program targets over $100 million in annual savings.
Brand performance varied, with Rao’s consumption growing 9.6% in the quarter and 11.3% for the full year. The premium sauce brand’s household penetration reached 18.9%, up 170 basis points year-over-year. The U.S. soup and broth category saw consumption rise 0.9% in Q4, with broth volumes up 11.8%, led by Pacific’s 28.4% growth. Premium brands Pacific and Rao’s sustained double-digit increases of 14% and 25.3%, respectively. Semi-scratch cooking sales grew 5%, accounting for over half of the Meals and Beverages division’s retail sales with a four-year compound annual growth rate above 5%.
Goldfish snacks returned to consumption growth, supported by double-digit e-commerce sales and a partnership with The Pokémon Company. Pepperidge Farm’s fresh bakery and cookies segment posted declines, with consumption down 4.4% and 4.7%, respectively. Salty snacks retail sales fell 7.8%, though pretzels saw a smaller decline of 5.4%.
Campbell plans to allocate approximately 85% of its working media budget to digital, social, influencer, and e-commerce channels, including AI-enabled platforms. National advertising campaigns are set to focus on Rao’s, Goldfish, and Pepperidge Farm brands.
