Kraft Heinz Company
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −1.04%.
Did KHC Beat Earnings? Q3 2025 Results
Kraft Heinz delivered a mixed third quarter for fiscal 2025, beating on the bottom line while falling short on revenue as persistent volume weakness continued to weigh on the packaged food giant. Adjusted EPS of $0.61 topped the $0.58 consensus estimate by 5.50%, though the figure still represented an 18.7% decline year over year, pressured by commodity and manufacturing cost inflation, a higher tax rate tied to global minimum tax regulations, and rising interest expense. Net sales slipped 2.3% to $6.24 billion, narrowly missing the $6.26 billion consensus, with North America proving the softest spot as that segment's revenue fell 3.8% to $4.64 billion while volume declines in coffee, cold cuts, and frozen snacks weighed heavily. The results arrived alongside a landmark strategic announcement: Kraft Heinz's board approved a plan to split the company into two independent publicly traded entities, a separation expected to close in the second half of 2026. Management also tightened its full-year outlook, narrowing Adjusted EPS guidance to $2.50 to $2.57 and projecting Organic Net Sales to decline 3.0% to 3.5%, with its stock recently touching a 52-week low near $23.89.
- Volume/mix declined 3.5 percentage points, primarily driven by declines in coffee, cold cuts, frozen snacks, certain condiments, and Indonesia
- Pricing increased 1.0 percentage point, largely driven by higher pricing in coffee to mitigate higher input costs
- Inflationary pressures in commodity and manufacturing costs outpaced efficiency initiatives
- Increased selling, general and administrative expenses primarily due to increased advertising
- Higher effective tax rate driven by global minimum tax regulations enacted by several countries
- Year-to-date free cash flow up 23.3% driven by working capital improvements in inventory and accounts payable
“Our third quarter results reflect a modest year-over-year improvement in our top-line performance relative to the first half of the year. While the operating environment remains challenging, we're seeing improvement driven in part by targeted investments we're making to deliver superior and affordable products to our consumers.”
Kraft Heinz CEO, on the earnings call
Forward Guidance & Outlook
For fiscal year 2025, Kraft Heinz updated its outlook: Organic Net Sales now expected to decline 3.0% to 3.5% (previously down 1.5% to 3.5%), reflecting slower Emerging Markets growth driven by Indonesia declines and U.S. Retail pressure. Constant Currency Adjusted Operating Income expected to decline 10% to 12% (previously down 5% to 10%). Adjusted Gross Profit Margin expected to be down approximately 100 basis points YoY. Adjusted EPS guidance narrowed to $2.50 to $2.57 (previously $2.51 to $2.67), with an effective tax rate of approximately 26% creating an approximate $0.23 YoY headwind. Interest expense expected at approximately $950 million and other income approximately $250 million for the full year. Free Cash Flow expected to increase YoY with Free Cash Flow Conversion of at least 100% (previously at least 95%). Company separation remains on track to close in the second half of 2026.
KHC YoY Financials
KHC Revenue by Segment
KHC Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.