Campbell's Cuts Dividend 36% and Targets $500 Million in Savings
The company reset the quarterly dividend to $0.25 a share and launched a fiscal 2030 cost program after a $117 million trademark impairment and a swing to a $0.23 a share loss.
The Campbell's Company (CPB) cut its quarterly dividend 36% to $0.25 a share, or $1.00 annualized, from $0.39 a share, or $1.56 annualized, and launched an enterprise-wide cost-savings program targeting $500 million by fiscal 2030 after a fourth quarter in which a $117 million trademark impairment pushed the company into a loss.
The board approved the lower payout, payable November 2, 2026, to accelerate debt reduction. In the fourth quarter, the company delivered about $25 million in savings, bringing total savings under the prior $375 million program to about $225 million. The new program folds in remaining initiatives from that program, an overhead savings effort announced in the third quarter, and an enterprise spend-optimization plan. Several actions were already underway, including plant closures and recently completed workforce reductions.
Net sales for the three months ended August 2, 2026, fell 8% to $2.1 billion, including an estimated 7-point impact from the extra week in the prior-year period. Organic net sales decreased 1%, a narrower decline than the 4% organic drop in the third quarter, driven primarily by lower volume/mix. Adjusted EBIT decreased 25% to $242 million, including an estimated 8% impact from the extra week. Diluted earnings swung to a loss of $0.23 a share from $0.48 a share. Adjusted EPS decreased 37% to $0.39, including an estimated $0.06 a share, or 7%, impact from the extra week.
GAAP EBIT collapsed to $4 million from $269 million. Other expenses were $147 million, including the $117 million combined impairment on the Cape Cod and Kettle Brand trademarks, compared with $29 million in the prior year. Corporate expense was $226 million versus $83 million, primarily due to impairment charges.
Adjusted gross profit margin decreased 190 basis points to 28.6%, a slower compression than the 240 basis points in the third quarter. The decline was driven primarily by cost inflation and other supply chain costs, including tariffs, partially offset by supply chain productivity improvements. Gross profit margin decreased 310 basis points to 27.3%.
Meals & Beverages net sales decreased 4% to $1,187 million. Organic net sales increased 3% on 3% volume/mix, including an estimated 2-point tailwind from the prior-year SAP implementation for Sovos Brands. U.S. soup sales decreased 8%, driven primarily by lapping the extra week. Operating earnings in the segment decreased 12% to $181 million.
Snacks net sales decreased 12% to $950 million. Organic net sales decreased 6% on 6% unfavorable volume/mix with 1% net price realization. Organic declines were driven primarily by the salty portfolio and sales attributable to third-party partner brands and contract manufacturing. Snacks operating earnings decreased 34% to $101 million.
For the full year ended August 2, 2026, net sales decreased 5% to $9.7 billion and 2% organically. Adjusted EBIT decreased 21% to $1.2 billion. Adjusted EPS decreased 27% to $2.17. Cash flow from operations was $1.0 billion.
President and Chief Executive Officer Mick Beekhuizen said fourth-quarter and fiscal 2026 results reflected top-line softness and inflation-driven margin headwinds, and that the company is increasing focus on the consumer, sharpening execution, reducing costs to support brand investment, and strengthening the balance sheet, including resetting the dividend.
The company guided full-year fiscal 2027 net sales down 4% to 2%, organic net sales growth down 4% to 2%, adjusted EBIT down 12% to 7% from $1,181 million, and adjusted EPS down 24% to 17% from $2.17, or $1.65 to $1.80 a share. The outlook reflects an external environment expected to remain volatile and another year of elevated inflation. The La Regina acquisition, completed May 4, 2026, is expected to contribute a modest benefit to net sales and be neutral to adjusted EPS. Guidance includes the company’s current understanding of government policy and tariffs and does not assume impacts from new tariffs or changes to existing rates.
Beginning in fiscal 2027, quarterly segment results will be adjusted retrospectively to move the frozen bakery business from Snacks to Meals & Beverages.