Kraft Heinz’s fourth quarter results reflected ongoing challenges in packaged foods demand, as the company’s sales declined year over year in line with Wall Street expectations. Management attributed performance to sustained pressure on sales volumes, particularly in North America, and acknowledged underinvestment in its brand portfolio over the past decade. CEO Steve Cahillane was candid about the need for change, stating, “I knew that the company was underinvested… and indeed, I did find underinvestment.” The team pointed to early signs of improvement in certain brands, but overall trends remained subdued.
Is now the time to buy KHC? Find out in our full research report (it’s free for active Edge members).
Kraft Heinz (KHC) Q4 CY2025 Highlights:
- Revenue: $6.35 billion vs analyst estimates of $6.37 billion (3.4% year-on-year decline, in line)
- Adjusted EPS: $0.67 vs analyst estimates of $0.61 (9.1% beat)
- Adjusted EBITDA: $1.42 billion vs analyst estimates of $1.43 billion (22.3% margin, 1% miss)
- Adjusted EPS guidance for the upcoming financial year 2026 is $2.04 at the midpoint, missing analyst estimates by 18%
- Operating Margin: 17.1%, up from -0.6% in the same quarter last year
- Organic Revenue fell 4.2% year on year (miss)
- Sales Volumes fell 4.7% year on year, in line with the same quarter last year
- Market Capitalization: $28.15 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Kraft Heinz’s Q4 Earnings Call
- Andrew Lazar (Barclays) asked if the $600 million brand investment is about catching up or responding to industry trends. CEO Steve Cahillane said the spending is to “get back to where we ought to be” after historic underinvestment, not just reacting to external pressures.
- Peter Galbo (Bank of America) questioned the rationale and timeline for pausing the planned business separation. Cahillane explained the pause followed deep operational review, with no set end date and a priority on restoring organic growth first.
- David Palmer (Evercore ISI) asked how the $600 million will be phased and which brands will see early results. Cahillane said spending ramps up in Q2, with expected improvements in the back half, especially for North American grocery brands.
- Leah Jordan (Goldman Sachs) inquired about the impact of SNAP changes on sales and strategy. CFO Andre Maciel noted 13% of U.S. retail sales are SNAP-related and detailed targeted pricing and pack adjustments to retain affected consumers.
- Christopher Carey (Wells Fargo) probed the mix and timing of pricing, promotions, and packaging initiatives. Cahillane and Maciel clarified that price adjustments and promotions will start early, while packaging changes will take longer to materialize.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will closely watch (1) early indicators of market share recovery in key U.S. brands as incremental investment rolls out, (2) the effectiveness of pricing and promotional strategies in offsetting SNAP-related headwinds, and (3) visible improvements in sales volumes and consumer engagement in both North America and emerging markets. Execution on the recruitment of new commercial talent and the rollout of new product innovation will also be critical milestones.
Kraft Heinz currently trades at $23.76, down from $24.90 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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