By Koyena Das
Sept 3 (Reuters) - Campbell's forecast weaker-than-expected annual profit and sales on Thursday and cut its quarterly dividend by more than a third as the soup maker struggles with soft demand for its pricier snacks, sending its shares down 6% before the bell.
The company said it had closed some plants and completed some workforce cuts to support margins as part of a program to save about $500 million in costs by fiscal 2030.
"Our results remain unacceptable," CEO Mick Beekhuizen said,
adding that Campbell's will be "addressing reality head-on." The company will also adjust prices in some categories to reflect changes in commodity costs, he said.
"(Campbell's) is clearly taking a much more aggressive self-help stance," Barclays analyst Andrew Lazar said.
Lower-income consumers are shifting toward cheaper value brands and store-label products, pressuring sales at companies including Campbell's that have raised prices in recent years to protect their margins.
A 10.75-ounce can of Campbell's tomato soup costs $1.48 on Walmart's website, while a 10.75-ounce tomato soup can from Walmart's private-label brand Great Value costs 70 cents, according to Reuters checks.
Campbell's expects fiscal 2027 net sales to fall between 2% and 4%, compared with analysts' estimate of a 0.8% drop, according to data compiled by LSEG.
It expects fiscal 2027 adjusted profit per share in the range of $1.65 to $1.80, compared with analysts' estimate of $1.86 per share as higher costs of raw material and fuel weigh.
The forecast reflects a volatile environment with elevated inflation, but sees benefits that are expected to support margins, Campbell's said.
Net sales fell 8% to $2.14 billion in the fourth quarter, steeper than analysts' average estimate of a 7.6% drop. Adjusted earnings per share of 39 cents were in line with analysts' estimates.
Volumes in the company's snacks segment fell 6%, while prices rose 1%. For its meals and beverages segment, where prices remained the same, volumes rose 3%.
(Reporting by Koyena Das in Bengaluru and Alexander Marrow in London; Editing by Pooja Desai)
