Campbell's announced a significant drop in its shares following a weak performance in its fiscal fourth quarter and a pessimistic outlook for fiscal 2027. The company reported a net sales decline of 8% to $2.14 billion in the fourth quarter of fiscal 2026, missing analysts' average estimates. Adjusted earnings per share for the quarter were $0.39, meeting estimates. For the full fiscal year 2026, net sales were $9.74 billion, a 5% decline year-over-year, and adjusted diluted EPS was $2.17.
The soup maker also cut its quarterly dividend by 36%, from $0.39 to $0.25 per share, aiming to accelerate debt reduction. This move, along with the lower-than-expected sales, contributed to a 7% decline in its shares before the bell. CEO Mick Beekhuizen acknowledged that performance "is not where it needs to be" and outlined plans to improve it, including a new program to save approximately $500 million in costs by fiscal 2030 through plant closures and workforce reductions.
Looking ahead, Campbell's provided a bleak forecast for fiscal 2027, expecting net sales to fall between 2% and 4%, which is worse than analysts' estimate of a 0.8% drop. Adjusted profit per share is projected to be in the range of $1.65 to $1.80, significantly below analysts' estimate of $1.86 per share. This reflects an environment of elevated inflation and a shift among lower-income consumers towards cheaper private-label brands, as a 10.75-ounce can of Campbell’s tomato soup costs $1.48 compared to Walmart's Great Value brand at $0.70. The company anticipates continued pressure from 5% to 6% raw material and packaging inflation and double-digit logistics inflation, despite expecting some margin benefits from productivity improvements and cost cuts.
