■ Cut · September 4, 2026
Campbell's Cuts Dividend 36% Amid Sales Decline and Cost-Cutting Plan
Campbell's reported a 5% sales drop and 33% earnings decline for fiscal 2026, leading to a 36% dividend cut and a new $500 million cost savings program.
Fiscal 2026 Results
Campbell's Company (CPB) reported disappointing results for its fourth quarter and full fiscal year ended August 2. Net sales fell 5% to $9.744 billion, while net earnings declined 33%. Both reporting segments underperformed: Meals & Beverages sales decreased 4%, and Snacks sales dropped 6%, driven by salty snacks. Volume decreases affected both segments.
Dividend Cut and Cost Savings
To accelerate debt reduction, Campbell's lowered its quarterly dividend by 36% to $0.25 per share, or $1.00 annually. The company also announced a new cost savings program targeting $500 million by fiscal 2030, building on its prior $375 million program, which delivered approximately $225 million in savings. The new program includes overhead savings initiatives and an enterprise spend optimization plan.
CFO Todd Cunfer noted ongoing actions, including the closure of two snacks plants in Hyannis, Mass., and Jeffersonville, Ind., and workforce reductions. Through a voluntary early retirement program and involuntary reductions, the salaried workforce was cut by approximately 13%.
Rao's Growth and Marketing Shift
An exception to the overall decline was Rao's, the premium pasta sauce brand acquired with Sovos Brands in early 2024. Rao's consumption grew 11% last year, and Campbell's has extended the brand into frozen dinners and dry pasta. CEO Mick Beekhuizen said Rao's remains a top priority with substantial growth potential.
Beekhuizen also announced a shift in marketing strategy: "We will direct a majority of this year's marketing budget toward our best opportunities, moving away from what has historically been a balanced approach across our portfolio." He emphasized the company is not abandoning any brand.
Fiscal 2027 Outlook
For fiscal 2027, Campbell's expects net sales to decline 2-4% and adjusted earnings to drop 7-12%. Beekhuizen cited a volatile external environment and elevated inflation pressuring margins, particularly in the first half. However, he expects productivity and cost savings to support margin recovery throughout the year.
What it means for income investors
The dividend cut reflects Campbell's focus on debt reduction amid challenging market conditions. With a lower payout ratio, the company may have more flexibility to manage its balance sheet, though the reduced yield may affect income-focused shareholders.
Reporting based on: foodprocessing.com. Figures verified against market data where available.