Kraft Heinz Company
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +6.33%.
Did KHC Beat Earnings? Q1 2025 Results
Kraft Heinz delivered a mixed first quarter for 2025, eking out a narrow earnings beat while falling short on the top line amid a broad-based sales retreat. Adjusted EPS came in at $0.62, clearing the $0.60 consensus by 2.70%, but net sales slid 6.4% year-over-year to $6.00 billion, a hair below the $6.02 billion analysts had expected. The primary culprit was a 5.6 percentage point drag from volume and mix, with weakness in Lunchables and an Easter timing shift accounting for a meaningful share of the shortfall, while foreign currency added an additional 1.6 percentage point headwind. North America, the company's largest segment, bore the brunt of the pressure with net sales falling 7.0% to $4.49 billion. Looking ahead, management lowered its full-year guidance, now projecting Organic Net Sales down 1.5% to 3.5% and Adjusted EPS of $2.51 to $2.67, citing tariff burdens and deteriorating consumer sentiment as key uncertainties, leaving <a href="https://247wallst.com/investing/2025/04/04/hedge-funds-are-dumping-tech-stocks-grab-these-4-safety-net-high-yield-dividend-giants-now/">income-focused investors watching closely</a> given the company's substantial dividend commitments.
- Volume/mix declined 5.6 percentage points, primarily driven by Easter timing shift (~90 bps) and Lunchables decline
- Price increased 0.9 percentage points, with increases in North America and Emerging Markets partially offset by lower price in International Developed Markets
- Higher pricing in certain categories to mitigate higher input costs, primarily in coffee
- Foreign currency represented a negative 1.6 percentage point impact on net sales
- Lower SG&A due to reduced variable compensation expense
- Higher income tax expense due to less favorable geographic mix and corporate entity structure changes
“In today's uncertain times, we are committed to controlling the controllables and making the necessary investments to deliver quality, taste, and value to our consumers through our beloved brands. This quarter, we delivered results in line with our top line expectations despite growing market pressures. We are encouraged by these results, and we will build on the progress we have made to drive consistent growth and profitability.”
Kraft Heinz CEO, on the earnings call
Forward Guidance & Outlook
For fiscal year 2025, Kraft Heinz lowered and widened its guidance: Organic Net Sales expected down 1.5% to 3.5% versus prior year, with sequential improvement expected each quarter and flat to slightly positive price contribution throughout the year. Constant Currency Adjusted Operating Income expected down 5% to 10%, including a ~150 basis point headwind from lapping lower variable compensation in 2024. Adjusted Gross Profit Margin expected down 25 to 75 basis points. Adjusted EPS guided to $2.51-$2.67, with an effective tax rate of approximately 26% (~$0.23 headwind YoY), interest expense of approximately $960 million, and other income of approximately $230 million. Free Cash Flow expected flat versus prior year with approximately 95% Free Cash Flow Conversion. Guidance does not reflect any impact from future potential share repurchases.
KHC YoY Financials
KHC Revenue by Segment
KHC Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.