FILE PHOTO: Cans of Campbell's cream of mushroom soup line a supermarket shelf in Bellingham, Washington, U.S. April 25, 2024. REUTERS/Chris Helgren/File Photo

By Savyata Mishra

(Reuters) -Campbell's Co on Wednesday said it will remove synthetic dyes from its food and beverage portfolio starting in fiscal 2026 and forecast annual profit below Wall Street expectations, hurt by higher tariffs.

The New Jersey-based company joins U.S. peers including PepsiCo, Kraft Heinz and Nestle USA, in phasing out the use of FD&C colors, responding to Health Secretary Robert F. Kennedy Jr.'s "Make America Healthy Again" initiative and shifting consumer preferences.

"In the second half of fiscal 2026...Campbell’s will no longer produce any of our food or beverages with FD&C colors," CEO Mick Beekhuizen said, adding the dyes are used in limited products.

The company will replace artificial dyes in products like Lance crackers and V8 Splash with natural colors from sources like annatto and purple carrot juice. Its regional snack and cookie brands will also stop using synthetic colors.

Shares of the Goldfish crackers maker rose 4% in early trading as it forecast fiscal 2026 net sales largely above expectations and beat the fourth-quarter profit estimate.

Campbell's said tariffs are expected to account for roughly 4% of cost of goods sold in fiscal 2026. It plans to offset about 60% of that impact through selective price increases and cost savings.

The comments highlight mounting challenges for consumer companies from the Trump administration's trade policies, as they contend with tepid demand from inflation-weary customers.

Beekhuizen said shoppers are becoming "increasingly deliberate" in their food choices and are focused on cooking at home.

The company expects annual adjusted profit per share to fall up to 18% to between $2.40 and $2.55, including tariffs, below the estimates of $2.63, according to data compiled by LSEG.

Net sales were forecast in the range of flat to decline of 2%, compared with expectations of a 2.4% drop.

The outlook suggests that demand is stabilizing, which is good news for investors in the short term, D.A. Davidson analyst Brian Holland said.

(Reporting by Anshi Sancheti and Savyata Mishra in Bengaluru; Editing by Tasim Zahid)