Campbell's forecasts weak year ahead on pressured consumer spending
CPB•Fourth-quarter results
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%.
Weak outlook and dividend cut
Campbell's said on Thursday it expects weaker-than-expected annual profit and sales and cut its quarterly dividend by more than a third as the soup maker struggles with soft demand for its pricier snacks.
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.
Consumers trade down as sales and profit guidance disappoint
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.
