FOOD PRODUCTS : The Page Turns to Dividend Concerns

Research evidence excerpt

FOOD PRODUCTS : The Page Turns to Dividend Concerns

EQUITIES

FOOD & HPC

FOOD PRODUCTS

The Page Turns to Dividend Concerns

Value-seeking behavior first emerged as a top-line problem for the packaged food group. It soon22 MAY 2026

Sector Research Report became a margin problem as fixed cost deleverage intensified and reinvestment needs rose. With

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inflation reaccelerating, the page is now turning to leverage and dividend concerns. Flowers Foods

Research Analysts & Publishing Entities

cut last night, and we see risk for Conagra followed by Campbell and General Mills.

Max Gumport

BNP Paribas Securities Corp1 What began as a top-line problem turned into a margin problem…(+1) 917 583 4529

max.gumport@us.bnpparibas.com When value-seeking behavior first emerged in 2023, it was a top-line problem for the group. Volumes

failed to turn positive even as pricing was lapped, and concerns around organic sales growth visibility

Alex Hilsenrath

reemerged. Over time, fixed cost deleverage and reinvestment needs transformed what began as aBNP Paribas Securities Corp1

(+1) 646 342 5084 revenue problem into a margin and profit headwind. As an example, we estimate EBIT for CPB’s

alex.hilsenrath@us.bnpparibas.com Snacks business could fall more than 50% below the implied FY27 target established two years ago.

John McDonald

BNP Paribas Securities Corp1 …and now is resulting in stretched balance sheets and dividend payout ratios

(+1) 646 342 5683 We believe there could be a next chapter to this story. Several companies in the group now face the

john.mcdonald@us.bnpparibas.com

dueling challenges of high leverage and dividend payout ratios. With inflation reaccelerating, we are

concerned that the next phase could require dividend cuts.