■ Cut · September 3, 2026
Campbell's Cuts Dividend 36%, Unveils $500M Savings Plan
Campbell's slashes dividend by 36% to $1.00 annually, targeting debt reduction, and announces $500M savings program as snacks slump drives EPS down 37%.
Dividend Cut and Deleveraging
The Campbell's Company (CPB) announced a 36% reduction to its quarterly dividend, lowering it to $0.25 per share, or $1.00 annually. The move, described as "difficult but necessary" by management, is expected to reduce annual cash outflows by approximately $170 million, which will be directed toward debt repayment. At fiscal year-end, the company carried $7.1 billion in debt, with a net leverage ratio of 4.3 times. The goal is to return to roughly three times leverage.
Savings Program and Restructuring
In conjunction with the dividend cut, Campbell's unveiled a new $500 million enterprise-wide savings program targeting fiscal 2030. This initiative supersedes prior cost-saving efforts and has already resulted in the closure of two snacks plants in Hyannis and Jeffersonville, as well as a 13% reduction in salaried roles through voluntary early retirement and involuntary cuts. These actions are part of a broader restructuring aimed at restoring growth and rebuilding margins.
Quarterly Performance and Segment Results
For the fiscal fourth quarter, Campbell's reported adjusted EPS of $0.39, down 37% year-over-year. Organic net sales declined 1%, with a 6% slide in snacks offsetting a 3% gain in meals and beverages. Adjusted EBIT fell 25%, and adjusted gross margin contracted 190 basis points to 28.6%, driven by nearly 6% cost inflation.
The snacks division remained a drag, with organic net sales down 6% and U.S. retail consumption down 5.1%. Segment operating earnings dropped 34% due to inflation and volume deleverage. Goldfish showed some resilience, with core Goldfish returning to growth, supported by double-digit e-commerce growth and a collaboration with The Pokémon Company. However, salty snacks suffered a 7.8% retail sales decline, with chips down 9.4%, particularly weak for Cape Cod and Kettle Brand.
In contrast, Meals & Beverages delivered organic net sales growth of 3%, aided by a $30 million timing benefit from last year's Sovos SAP implementation. Rao's continued to be a standout, with consumption growing 9.6% in the quarter and 11.3% for the full year, reaching household penetration of 18.9%. Broth was a bright spot, with category consumption jumping 11.8%, led by Pacific's 28.4% surge.
Fiscal 2027 Guidance
Looking ahead, Campbell's provided guidance for fiscal 2027, expecting organic net sales to decline 2%-4%, adjusted EBIT to fall 7%-12%, and adjusted EPS of $1.65-$1.80, representing a decline of 17%-24%. The outlook assumes raw material and packaging inflation of 5%-6% and double-digit logistics inflation. Management warned that the first quarter would be particularly weak, with organic sales and profits expected to decline below the lower end of the full-year range, reflecting elevated marketing investment and continued snacks pressure.
What it means for income investors
The dividend cut, while reducing current income, is aimed at strengthening the balance sheet and positioning the company for long-term stability. Income investors may note that the new annual dividend of $1.00 per share still provides a yield, but the reduction signals ongoing challenges in the snacks segment and inflationary pressures.
Reporting based on: finance.biggo.com. Figures verified against market data where available.