Campbell's taps price hikes, cost cuts as results 'remain unacceptable'

Sept. 3 (Reuters) - Campbell's CPB.O said on Thursday it has closed plants, cut jobs and planned more price increases on select products as the soup-and-snacks maker seeks to offset rising costs and restore profitability.

Its shares were down about 11% and on track for their worst day since 2018 as the company also cut its dividend by a third and forecast annual sales and profit below estimates.

"Our results remain unacceptable," CEO Mick Beekhuizen said, adding that Campbell's will be "addressing reality head-on."

Consumer goods companies have increasingly faced resistance from budget-conscious shoppers, particularly lower-income households that have gravitated toward cheaper, private-label and value brands.

Despite this, Campbell's has raised prices in recent years to protect its margins against rising costs of raw materials, logistics and investments behind soup and sauce launches and holiday merchandising programs.

The company has implemented average price increases of 4% to 5% across roughly 60% of its portfolio, with benefits expected to begin flowing through in the second quarter, even as sales take a hit, CFO Todd Cunfer said on a call with analysts.

"(Campbell's) is clearly taking a much more aggressive self-help stance," Barclays analyst Andrew Lazar said.

The company said it plans to generate about $500 million in cost savings by fiscal 2030.

Campbell's expects fiscal 2027 net sales to decline 2% to 4%, compared with analysts' expectations for a 0.8% drop, according to data compiled by LSEG. It forecast adjusted earnings per share of $1.65 to $1.80, below estimates of $1.86.

Net sales fell 8% to $2.14 billion in the fourth quarter, slightly missing estimates of $2.15 billion, while adjusted earnings per share of 39 cents were in line with expectations.