Campbell's stock plunges as food maker slashes dividend after sales, profit declines

Campbell Soup Company's stock fell by 6% in early trading on Thursday. The decline stemmed from the food manufacturer's reduced dividend following a quarterly report showing a decline in sales, earnings, and gross profit margin. Campbell's CEO Mick Beekhuizen disclosed the company's restructuring of its dividend as part of a strategy to reduce debt and bolster its balance sheet.

The company's board approved a 36% cut in the quarterly dividend to $0.25 per share. In its fourth quarter, Campbell's net sales fell by 8% to $2.1 billion, while its gross profit margin decreased by 310 basis points to 27.3%. Adjusted earnings per share also dropped by 37% to $0.39. Campbell's challenges are compounded by rising costs for agricultural commodities, with farm inputs like corn, wheat, and sugar surging by double digits in August.

To address these issues, Campbell is implementing a comprehensive cost-cutting initiative, pledging to achieve $500 million in total cost savings by fiscal year 2030. As of the current fiscal year, the company's stock has declined approximately 15%. Ines Ferre, a senior business reporter for Yahoo Finance, contributed to this report.