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

By Koyena Das and Neil ‌J Kanatt

Sept 3 (Reuters) - ​Campbell's ​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 risings 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.

"The brand needs innovation, packaging, and price-pack architecture that can change perceptions and ⁠give consumers a reason to choose it beyond nostalgia," eMarketer analyst Suzy Davidkhanian said.

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, sightly missing estimates of $2.15 billion, while adjusted earnings per share of ‌39 cents were in line with expectations.

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%.

(Reporting by Koyena Das in Bengaluru and Alexander Marrow in London; Editing by Pooja Desai and ‌Devika Syamnath)

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