Core Insights - Kraft Heinz reported revenue of $6.24 billion for the quarter ended September 2025, a decrease of 2.3% year-over-year, with EPS at $0.61 compared to $0.75 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $6.25 billion by 0.16%, while the EPS exceeded the consensus estimate of $0.57 by 7.02% [1] Revenue Performance - International net revenues were $895 million, slightly below the estimated $896.61 million, reflecting a year-over-year increase of 1.5% [4] - North America net revenues were reported at $4.64 billion, slightly above the average estimate of $4.63 billion, but showed a decline of 3.8% year-over-year [4] - Emerging Markets net sales reached $701 million, below the estimated $712.1 million, but represented a year-over-year increase of 3.9% [4] Operating Income - Segment Adjusted Operating Income for General corporate expenses was reported at -$121 million, better than the estimated -$175.92 million [4] - Segment Adjusted Operating Income for Emerging Markets was $79 million, compared to the average estimate of $91.09 million [4] Stock Performance - Kraft Heinz shares have returned -2% over the past month, while the Zacks S&P 500 composite increased by 3.8% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

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Financial Data and Key Metrics Changes - The company reported a modest year-over-year recovery in top-line performance, although the operating environment remains challenging due to worsening consumer sentiment and ongoing inflation [3][4] - The profit revision of 25% is primarily due to lower expectations of consumption in the U.S. and increased inflation in meat and coffee, rather than additional investments [8][10] - Promotional investment in the U.S. is being increased by approximately $300 million, with an additional $80 million in marketing spending [10][12] Business Line Data and Key Metrics Changes - The North American grocery company experienced a significant improvement in trends in Q3 compared to the first half, but still declined in low single digits [34][35] - The Global Taste Elevation Co also declined in low single digits, but is expected to improve in Q4 [34] - Emerging markets, excluding Indonesia, grew by 9.2%, with the Heinz brand in these markets growing by 13% year-to-date [28][29] Market Data and Key Metrics Changes - Consumer sentiment in Indonesia has declined nearly 10 points year-over-year, leading to a softening of demand [27][29] - Indonesia represents approximately $300 million in revenue, accounting for about 12% of the emerging markets business [29] - The overall market in the U.S. is expected to worsen, impacting consumption despite improvements in market share [45][50] Company Strategy and Development Direction - The company remains on track to separate into two independent companies by 2026, focusing on driving performance and positioning both businesses for long-term success [4][21] - The strategy includes a focus on brand growth and consumer-centric approaches, with an emphasis on R&D and marketing investments to drive product renovation [12][13] - The company is committed to maintaining a strong balance sheet and investment-grade ratings for both future entities [21][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by consumer sentiment and inflation, which are influencing buying behavior globally [3][4] - The outlook for Q4 suggests revenue may decline compared to Q3, primarily due to inventory phasing and lower consumption expectations [42][44] - Management is optimistic about the long-term potential of the brand portfolio, despite current cyclical challenges [60] Other Important Information - The company is actively rightsizing inventory and transitioning to a new distributor in Indonesia to address current challenges [28][30] - There is a focus on tactical investments to build brand equity and drive consumer trial of new products [12][56] Q&A Session Summary Question: Impact of Weaker Consumer Sentiment on Profit Revision - Management clarified that the profit revision is not linked to additional investments but is due to lower consumption expectations and inflationary pressures [8][10] Question: Thoughts on Potential Pivot for Kraft Heinz - Management emphasized that the decision to separate into two companies was made to unlock shareholder value and that they are committed to the current plan [17][20] Question: Performance of Emerging Markets Excluding Indonesia - Emerging markets, excluding Indonesia, grew by 9.2%, with the Heinz brand showing strong growth [28][29] Question: Promotional Spending and Market Share - Management noted that promotional spending is concentrated around key holidays, and they are focusing on driving household penetration through strategic promotions [46][56] Question: Challenges in Commoditized Categories - Management acknowledged difficulties in categories like coffee and meats but emphasized the ongoing implementation of the brand growth system [62]

Core Viewpoint - Kraft Heinz reported third-quarter earnings with revenue of $6.24 billion, slightly below analyst expectations of $6.26 billion, while adjusted earnings per share were $0.61, exceeding the expected $0.58 [1] Financial Performance - Revenue for the third quarter was $6.24 billion, which is lower than the anticipated $6.26 billion [1] - Adjusted earnings per share were reported at $0.61, surpassing the forecast of $0.58 [1] Guidance Revision - The company has lowered its full-year sales and profit guidance due to weak demand for its higher-priced snacks and kitchen condiments [1] - Full-year organic sales are now expected to decline by 3% to 3.5%, revised from the previous forecast of a decline of 1.5% to 3.5% [1] - Adjusted earnings per share for the full year are projected to be between $2.50 and $2.57, down from the earlier expectation of $2.51 to $2.67 [1]

Core Insights - Kraft Heinz (KHC) reported quarterly earnings of $0.61 per share, exceeding the Zacks Consensus Estimate of $0.57 per share, but down from $0.75 per share a year ago [1] - The company posted revenues of $6.24 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 0.16% and down from $6.38 billion year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +7.02%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - Kraft Heinz's shares have declined approximately 16.9% year-to-date, contrasting with the S&P 500's gain of 17.2% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.69 on revenues of $6.58 billion, and for the current fiscal year, it is $2.57 on revenues of $25.18 billion [8] - The estimate revisions trend for Kraft Heinz was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - The Food - Miscellaneous industry, to which Kraft Heinz belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, suggesting potential challenges ahead [9]

Financial Data and Key Metrics Changes - In Q3 2025, organic net sales declined by 2.5%, showing a modest year-over-year improvement of 80 basis points from a decline of 3.3% in the first half of the year [34] - Adjusted operating income decreased by 16.9%, with a margin decline of 310 basis points [37] - Free cash flow reached $2.5 billion, with a conversion rate of 109%, up over 30 percentage points from the previous year [42] Business Line Data and Key Metrics Changes - North America organic net sales declined by 3.8%, with a 100 basis point improvement from the first half of the year [34] - Global away from home organic net sales declined by 2.4%, while international away from home saw growth for the 18th consecutive quarter [11][35] - Emerging markets experienced a 4.7% increase in organic net sales, driven by double-digit growth in Latin America and the Middle East and Africa [36] Market Data and Key Metrics Changes - The U.S. away from home industry remains under pressure, particularly in chains and restaurants, while non-commercial channels are growing [14] - In emerging markets, the Heinz brand grew by 14% in Q3, with a total of nearly 900,000 distribution points [16][18] - The company gained market share across 70% of its U.S. taste elevation portfolio in September [12] Company Strategy and Development Direction - The company is on track to separate into two focused entities by 2026, aiming to improve execution and drive efficiencies [5][6] - Investments in marketing, R&D, and technology are central to the company's recovery strategy [19][30] - The brand growth system is being utilized to enhance category growth and brand superiority [19] Management's Comments on Operating Environment and Future Outlook - The operating environment remains challenging due to worsening consumer sentiment and inflation [5] - The company anticipates a longer path to consumer recovery, with pressures expected to persist beyond Q4 [50] - The outlook for 2025 has been updated, expecting organic net sales to decline by 3% to 3.5% [47] Other Important Information - The company has returned $1.8 billion to shareholders year-to-date through dividends and share repurchases [45] - Adjusted EPS is expected to be in the range of $2.50 to $2.57, reflecting a higher effective tax rate and interest expense [48] Q&A Session Summary Question: What are the expectations for the consumer environment moving forward? - Management noted that the consumer is navigating a tough environment with worsening sentiment and rising costs, leading to a longer recovery path [50] Question: How is the company addressing challenges in Indonesia? - The company is executing a comprehensive plan to stabilize the distributor network and reset inventory levels in Indonesia [9] Question: What are the capital allocation priorities post-separation? - The company will focus on investing in the organic business, maintaining net leverage around three times, actively managing the portfolio, and returning excess capital to shareholders [43][44]

Kraft Heinz lowered its sales outlook in a sign of increasing weakness among US consumers as the company prepares to split its business in two https://t.co/HN2yLM9gu1 ...

Core Viewpoint - Kraft Heinz reported lower third-quarter sales and adjusted its full-year outlook due to concerns about rising inflation and a decrease in consumer spending [1] Company Summary - Kraft Heinz experienced a decline in third-quarter sales, indicating potential challenges in maintaining revenue growth [1] - The company has revised its full-year outlook downward, reflecting a cautious approach in light of current economic conditions [1] Industry Summary - The food industry is facing pressures from higher inflation, which is impacting consumer purchasing behavior [1] - There is a noticeable pullback in consumer spending, which may affect overall sales across the industry [1]

Core Insights - The food producer experienced a decline in quarterly sales, which is attributed to industry-wide concerns regarding higher inflation [1] Company Summary - The company reported a decrease in sales figures for the quarter, indicating potential challenges in maintaining revenue growth amidst rising inflationary pressures [1] Industry Summary - The food industry is facing significant concerns related to higher inflation, which is impacting sales performance across various companies [1]

Core Viewpoint - Kraft Heinz has lowered its annual sales and profit forecasts, indicating ongoing weakness in demand for its higher-priced snacks and pantry condiments among budget-conscious consumers amid macroeconomic challenges [1] Company Summary - The company is experiencing persistent demand issues, particularly for its premium snack products and condiments, as consumers are becoming more price-sensitive [1] - The revised forecasts suggest that Kraft Heinz is facing significant challenges in maintaining sales growth in the current economic environment [1] Industry Summary - The broader industry is witnessing a shift in consumer behavior, with a trend towards more budget-friendly options as economic pressures mount [1] - This trend may impact the overall market dynamics for food and beverage companies, particularly those focused on premium products [1]