Campbell Soup Forecasts Sales Decline, Cuts Dividend Amid Weak Consumer Demand

Campbell Soup Co. on Thursday provided an annual sales and profit forecast that missed analyst expectations and announced a dividend cut of more than one-third, signaling persistent struggles with weak consumer demand. The news sent the company's shares down 7% in pre-market trading as investors reacted to signs that price-sensitive shoppers are trading down from its well-known brands.

Disappointing Outlook

For its fiscal year 2027, Campbell's projected a significant downturn, reflecting what it called a "volatile environment with elevated inflation."

• Net Sales: The company expects a decline of 2% to 4%, which is steeper than the 0.8% drop analysts had forecast, according to LSEG data.
• Adjusted Profit: Fiscal 2027 adjusted earnings per share are anticipated to be between $1.65 and $1.80, below the Wall Street consensus of $1.86 per share.

The weak guidance followed a challenging fourth quarter, where net sales fell 8% to $2.14 billion, missing estimates of a 7.6% decline. Adjusted earnings of 39 cents per share were in line with expectations.

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Consumer Pressures and Corporate Response

The company's performance highlights a broader trend of consumers, particularly those with lower incomes, shifting to less expensive private-label products. A price comparison by Reuters noted a can of Campbell's tomato soup on Walmart's website costs $1.48, while Walmart's own Great Value brand equivalent is priced at 70 cents.

This pressure was evident in the company's fourth-quarter segment results. The snacks division saw volumes fall by 6% even as prices rose 1%. In contrast, the meals and beverages segment, where prices were flat, experienced a 3% increase in volume.

In response, Campbell's is implementing significant cost-saving measures, including plant closures and workforce reductions. These actions are part of a larger plan to save approximately $500 million in costs by fiscal 2030. "Our performance is not where it needs to be and we are taking decisive action to improve it," CEO Mick Beekhuizen said in a statement.