Campbell’s Company announced sweeping layoffs and plant closures as part of a broad restructuring aimed at returning the 155-year-old food giant to profitability. The company is cutting 13% of its salaried workforce — approximately 560 positions from its 4,300 salaried employees — and closing two snack plants in a move targeting $500 million in cost savings by fiscal 2030.

‘Make no mistake, our results remain unacceptable,’ CEO Mick Beekhuizen told analysts. ‘But instead of waiting for the environment to improve around us, we are addressing reality head-on.’

The restructuring comes as consumer goods companies face mounting pressure from budget-conscious shoppers gravitating toward private-label and value brands. Campbell’s has implemented average price increases of 4% to 5% across roughly 60% of its portfolio to protect margins against rising raw material and logistics costs.

For Houston’s retail and grocery sector, the Campbell’s turnaround highlights broader trends affecting consumer packaged goods companies operating in the region. Major Houston-area distributors and retailers that carry Campbell’s products — including Walmart, H-E-B, and Kroger — may see shifts in product availability and pricing as the company restructures.

The company expects fiscal 2027 net sales to decline 2% to 4%, compared with analysts’ expectations of a 0.8% drop. Adjusted earnings per share guidance of $1.65 to $1.80 also fell below the consensus estimate of $1.86. Net sales fell 8% to $2.14 billion in the fourth quarter, slightly missing estimates of $2.15 billion.

CFO Todd Cunfer indicated that benefits from the price increases are expected to flow through in the second quarter, even as the company acknowledged sales may take a near-term hit. The snacks segment saw volumes fall 6% while prices rose 1%, while the meals and beverages segment posted a 3% volume increase with flat pricing.

The layoffs add to a wave of corporate restructuring across the consumer goods sector. Campbell’s shares fell 3.37% to $21.38 following the announcement, reflecting investor concerns about the company’s near-term trajectory despite management’s commitment to restoring long-term value creation.

Source: Fox Business