Food stocks dropped on Thursday as high inflation and careful consumer spending continued to affect major companies in the industry.
Campbell’s, a well-known soup brand in the U.S., admitted its performance needs improvement, according to its chief executive. Meanwhile, Tyson Foods’ shares fell after the company lowered its revenue growth forecast.
Campbell’s shares dropped almost 10%, and Tyson Foods fell more than 7%. Other food companies like Kraft Heinz, PepsiCo, and Hormel Foods also saw their stocks decline.
Campbell’s reduced its quarterly dividend by 36% to 25 cents per share to help protect its finances as consumer spending stays weak. The company has closed plants and cut jobs as part of a plan to save $500 million by 2030. Chief executive Mick Beekhuizen said the results are still not good enough and that management is taking strong steps to improve. He added that Campbell’s is facing the current challenges by focusing more on consumers, improving how it operates, and changing prices in some areas to match changing costs.
Campbell’s reported adjusted fourth-quarter earnings of 39 cents per share, which met expectations. Sales dropped 8% to $2.1 billion, also matching forecasts, and organic sales were down 1%. The snacks division had a bigger sales drop than the meals and beverages segment.
The company expects more challenges in the next fiscal year. Campbell’s predicts net sales will fall by 2% to 4%, which is a bigger drop than analysts expected. The company also expects adjusted earnings of $1.65 to $1.80 per share, which is lower than Wall Street’s average forecast.
BNP Paribas said Campbell’s outlook was worse than expected and believes the company still needs to do a lot to regain investor trust, especially in its salty snacks business.
Tyson now expects its revenue to grow by 1.5% to 2% in fiscal 2026, down from its earlier forecast of 2.5% to 3.5%. This lower outlook comes after the company announced more beef plant closures last month because of a major cattle shortage in the U.S., which has hurt profits. Tyson said it will focus operations at its plants in Dakota City, Nebraska, and Holcomb, Kansas. These plants will take on production from the closed facilities, so the total number of cattle processed will stay about the same.
