The packaged-food maker slashed its quarterly payout to $0.25, a 36 percent reduction and its first dividend cut in 25 years, after fiscal fourth-quarter sales fell 8 percent. Shares dropped 6.96 percent to $22.13, and the move pressured Kraft Heinz and General Mills as investors reassess staple stocks as income plays.
Campbell's cut its quarterly dividend 36% to $0.25, the first reduction since 2001, as snack-aisle weakness and falling sales pressured free cash flow. The packaged-food maker closed at $22.13, down 6.96%, on volume of 37.4 million shares, about 343% above its three-month average of 8.4 million.
"Our performance is not where it needs to be, and we are taking decisive action to improve it," Mick Beekhuizen, Campbell's president and chief executive officer, said. "We are increasing our focus on the consumer, sharpening execution, reducing costs to support investment in our brands, and strengthening our balance sheet, including resetting our dividend."
The board-approved cut, payable Nov. 2 to shareholders of record Oct. 1, trims the annual payout to $1.00 and still yields about 4.5 percent. Campbell's reported a fiscal fourth-quarter net loss of $69 million, or $0.23 a share, against net earnings of $145 million, or $0.48 a share, a year earlier. Net sales fell 8 percent to $2.14 billion, with organic sales down 1 percent; an extra week in the prior-year quarter accounted for roughly 7 percent of the decline. Adjusted earnings came in at $0.39 a share, down from $0.62 a year earlier.
The company guided fiscal 2027 adjusted earnings to $1.65-$1.80 a share on a 2-4 percent sales decline and launched a $500 million cost-savings program through fiscal 2030. The La Regina acquisition, completed May 4, is now fully consolidated into results.
The move rippled across packaged-food peers, with Kraft Heinz down 3.20 percent to $25.42 and General Mills down 3.25 percent to $39.26, even as the S&P 500 rose 1.07 percent to 7,748. A dividend cut at a stalwart consumer-staples name points to structural weakness in the snack aisle and raises questions about the appeal of staple stocks as defensive income plays. Campbell's shares have fallen 20 percent this year; investors will watch whether peers follow with balance-sheet resets and how the cost program rebuilds margins through fiscal 2027.
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