Campbell's forecasts weak year ahead on pressured consumer spending

By Koyena Das

Sept 3 (Reuters) - Campbell's ‌forecast weaker-than-expected ​annual profit ​and sales on Thursday and cut its quarterly dividend by more than a third as the soup maker struggles with soft ‌demand for its pricier snacks, sending its shares down 6% before ⁠the bell.

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.

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.

A 10.75-ounce can of Campbell's ​tomato soup costs $1.48 on Walmart's website, while ‌a 10.75-ounce tomato soup can from Walmart's private-label brand Great Value costs 70 cents, according to Reuters checks.

Campbell's expects fiscal 2027 ⁠net sales to fall between 2% and 4%, compared with analysts' estimate of a 0.8% drop, according to data compiled by LSEG.

It expects fiscal 2027 adjusted profit per ⁠share in the range of $1.65 to $1.80, compared with analysts' estimate of $1.86 per share as higher ​costs of raw material and fuel weigh.

The forecast reflects a volatile environment with elevated inflation, but sees benefits that are expected to support margins, Campbell's said.

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%.

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

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