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Kraft Heinz Earnings Preview: What to Expect
Yahoo Finance· 2025-10-19 11:07
Pittsburgh, Pennsylvania-based The Kraft Heinz Company (KHC) is a leading global food and beverage company, formed in 2015 through the merger of Kraft Foods and H.J. Heinz. With a market cap of $30.2 billion, it produces iconic brands like Kraft, Heinz, Oscar Mayer, and Philadelphia, offering products across condiments, cheese, snacks, and packaged meals. The food titan is expected to announce its fiscal third-quarter earnings for 2025 before the market opens on Wednesday, Oct. 29. Ahead of the event, ana ...
The Kraft Heinz Company (KHC): A Bull Case Theory
Yahoo Finance· 2025-09-17 17:20
Core Thesis - The Kraft Heinz Company is undergoing a significant restructuring by splitting into two entities: Global Taste Elevation Co (GTE) and North American Grocery Co (NAG), aiming to improve operational focus and unlock value for shareholders [2][3][4] Company Performance - Kraft Heinz's stock was trading at $26.90 as of September 8th, with trailing and forward P/E ratios of 22.43 and 9.94 respectively [1] - The company has faced nearly a decade of disappointing stock performance post-2015 merger, leading to a $15.4 billion write-down in 2019 and a dividend cut due to aggressive cost-cutting measures [2][3] Split Details - GTE will manage brands like Heinz and Philadelphia, projected to achieve $15.4 billion in revenue and $4 billion in adjusted EBITDA in 2024, with 26% margins and potential mid-single-digit growth [3] - NAG will oversee brands such as Oscar Mayer and Lunchables, expected to generate $10.4 billion in revenue and $2.3 billion in EBITDA at over 20% margins, providing stable cash flow and dividends [3] Strategic Implications - The split is designed to streamline operations, allowing each entity to focus on distinct growth trajectories and address complexities that have hindered performance [3][4] - Both companies will maintain investment-grade status, and the split will be tax-free for shareholders, indicating a strategic move to enhance capital allocation and brand investment [4] Market Outlook - The restructuring is anticipated to unlock hidden value for shareholders while ensuring steady cash returns, with Berkshire Hathaway's 27% stake reflecting cautious optimism about the company's future [4][6]
Billionaire Mario Gabelli Says He’s Thinking About Buying More Kraft Heinz (KHC) Shares
Yahoo Finance· 2025-09-17 12:07
Group 1 - Mario Gabelli, chairman and CEO of GAMCO Investors, expressed interest in buying Kraft Heinz Co (NASDAQ:KHC) in pieces, particularly in light of the company's plan to split into two entities [1][2] - Gabelli indicated that the split could potentially increase the value of the pieces to the mid-$30s range, suggesting a positive outlook on the financial engineering involved [2] - Longleaf Partners Fund noted that Kraft Heinz was a detractor in their second quarter 2025 performance, but highlighted a shift towards premium offerings that could be overlooked by the market [3] Group 2 - There is speculation regarding Berkshire Hathaway potentially reducing its stake in Kraft Heinz, although this situation is considered nuanced [3] - Longleaf Partners Fund acknowledged the investment potential of Kraft Heinz but expressed a stronger conviction in AI stocks for higher returns with limited downside risk [3]
Kraft Heinz to Separate Into Two Businesses: What Should Investors Know
Benzinga· 2025-09-16 21:09
Core Viewpoint - Kraft Heinz is planning to split into two independent, publicly traded companies through a tax-free spin-off expected in H2 2026, aimed at enhancing growth and capital allocation strategies for each entity [1][10]. Spin-Off Details - Global Taste Elevation Co. will focus on sauces, spreads, and shelf-stable meals, including brands like Heinz and Kraft Mac & Cheese, generating approximately $15.4 billion in sales for FY 2024, with about 75% of its sales from sauces and spreads [2]. - North American Grocery Co. will encompass grocery staples such as Oscar Mayer and Kraft Singles, with sales of $10.4 billion in 2024, and approximately 75% of its brands holding category leadership [4]. Strategic Rationale - The split is a strategic response to flattening growth, allowing investors to choose between the higher growth potential of Global Taste Elevation Co. and the stability of North American Grocery Co. [6]. - The separation is expected to improve capital allocation and innovation efficiency by reducing internal trade-offs, enabling each business to tailor its strategy more effectively [10]. - The differing growth profiles of the two businesses highlight the need for distinct strategies, with Global Taste Elevation Co. facing different margin pressures and geographic expansion opportunities compared to the more stable North American Grocery Co. [10]. Tax Status & Timeline - The spin-off will be tax-free for Kraft Heinz and its shareholders, pending necessary approvals, with an expected completion in H2 2026 [10].
Best Stock to Buy Right Now: Constellation Brands vs. Kraft Heinz
The Motley Fool· 2025-09-07 09:05
Core Insights - Constellation Brands and Kraft Heinz have both experienced significant stock declines over the past year, with Constellation down over 40% and Kraft Heinz down about 25%, while the S&P 500 rose nearly 20% during the same period [3][9][12] Constellation Brands - Constellation generates most of its revenue from beer, facing challenges from tariffs and declining demand among younger consumers [5][7] - The Trump administration's tariffs on aluminum have increased from 25% to 50%, impacting Constellation's margins as 39% of its beer shipments come in aluminum cans [6] - The company is attempting to adapt by launching new alcoholic beverages and divesting lower-end brands to focus on higher-end products, which may strengthen long-term margins but hinder near-term revenue growth [8] - For fiscal 2026, Constellation expects organic sales to dip 4% to 6% and comparable EPS to drop 16% to 18%, leading to a stock valuation of 12 times forward earnings [9] Kraft Heinz - Kraft Heinz owns a portfolio of well-known brands but has struggled post-merger due to a focus on cost-cutting rather than brand revitalization [10] - The company faced a $15 billion write-down in 2019 and has since recovered by divesting weaker brands and raising prices, but organic net sales dipped 2% in 2024 [11][12] - For 2025, Kraft Heinz expects organic net sales to decline by 1.5% to 3.5% and adjusted EPS to drop 13% to 18%, with the stock trading at 10 times forward earnings [12] - Kraft Heinz plans to split into two companies by the second half of 2026, but concerns remain about whether this will effectively address its challenges [13] Investment Considerations - Both companies face significant challenges that hinder their attractiveness as investments, with a preference for Constellation due to clearer long-term strategies [14][15]
Kraft Heinz(KHC) - 2025 FY - Earnings Call Transcript
2025-09-03 15:30
Financial Data and Key Metrics Changes - The company announced plans to split into two separate entities: Global Taste Elevation Co and North American Grocery Co, aiming to improve focus and performance [3][4] - The company has been experiencing flat growth in the Global Taste Elevation segment, primarily due to pressures in the U.S. market, while international markets show mid- to high single-digit growth [19][20] Business Line Data and Key Metrics Changes - The Lunchables brand has seen growth due to focused innovation and marketing efforts, demonstrating the effectiveness of the brand growth system [6][66] - The North American Grocery Co is expected to have significant margin opportunities, with a focus on improving operational efficiencies and expertise [37][40] Market Data and Key Metrics Changes - The U.S. market has faced challenges, including prolonged consumer pressure and a shift towards lower-priced options, impacting overall performance [22][23] - The company is adapting to changing consumer behaviors by expanding its presence in dollar channels, such as Dollar General, to provide more options for cost-conscious consumers [25][66] Company Strategy and Development Direction - The separation is intended to reduce complexity and enhance focus, allowing each entity to align resources and strategies more effectively [7][54] - The company aims to drive growth through targeted investments in key platforms, including taste elevation, ready-to-eat meals, and snacking [12][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current challenges in the food industry but remains committed to long-term investments in brand quality and marketing, rather than short-term volume gains [65][66] - The company is confident that its strategic focus and investments will lead to improved performance over time, despite current pressures [66][67] Other Important Information - The company expects to incur approximately $300 million in dissynergies due to the split, with costs distributed across various operational areas [32][33] - The Global Taste Elevation segment is projected to achieve top-line growth towards the upper end of the company's growth algorithm, while North American Grocery is expected to grow in the low single digits [34][36] Q&A Session Summary Question: Why is the separation expected to improve performance? - Management believes that increased focus will lead to better performance and unlock shareholder value, as seen in past initiatives [4][5] Question: How does the competitive landscape affect the decision to split? - The company faces competition from specialized firms, and the split will allow for deeper expertise and focus in each business area [9][10] Question: What are the expected dissynergies from the split? - The estimated $300 million in dissynergies will primarily impact COGS, technology, and SG&A, with most synergies expected to benefit the global company [32][33] Question: How does the growth outlook compare to market share expectations? - The Global Taste Elevation segment is expected to grow due to its exposure to emerging markets, while North American Grocery can afford to lose some market share and still meet growth expectations [34][36] Question: Will there be a margin reset for North American Grocery? - Management does not foresee a significant margin reset but acknowledges the need for targeted investments to drive efficiencies [38][41] Question: What is the rationale for including mac and cheese in Global Taste Elevation? - Mac and cheese fits within the growth strategy due to its strong market share and margins, and the company is investing in improving its quality and marketing [46][50]
卡夫亨氏公司宣布将拆分为两家独立上市公司
Core Viewpoint - Kraft Heinz Company announced plans to split into two independent publicly traded companies, one focusing on grocery foods and the other on sauces and spreads [1] Group 1: Company Structure - The grocery foods company will have annual sales of approximately $10.4 billion, including brands like Oscar Mayer and Lunchables [1] - The sauces and spreads company will have annual sales of about $15.4 billion, featuring brands such as Heinz, Philadelphia, and Kraft Mac & Cheese [1] - The split is expected to be completed in the second half of 2026, with the company reserving up to $300 million for associated costs [1] Group 2: Leadership Changes - Carlos Abrams-Rivera will lead the grocery foods business, while the company is in the process of finding a CEO for the sauces business [1] Group 3: Market Reaction - Warren Buffett of Berkshire Hathaway expressed disappointment regarding the split, suggesting that it does not address the underlying issues faced by the company [1]
Kraft Heinz to split into two companies 10 years after merger
NBC News· 2025-09-02 19:26
Craft Hinds announced plans today to split into two companies, unwinding much of its 10-year-old 46 billion dollar merger that created one of the biggest food companies in the world. The first of the two new companies, which are not yet named, will include shelf stable meals and will be home to brands such as Hines, Philadelphia, and Craft Mac and Cheese. The second company is going to be a portfolio of American staples such as craft singles and Lunchables. ...
Kraft Heinz's Breakup Could Unlock 50% Upside?
Forbes· 2025-09-02 14:30
Core Viewpoint - Kraft Heinz is planning to split into two publicly traded entities by the latter half of 2026, reversing the 2015 merger, which has been criticized for its poor performance [2][3] Group 1: Industry Context - The spin-off reflects challenges in the packaged food industry, including stagnant demand, changing consumer preferences, and increased competition from private labels [3] - The stock price saw minimal change, increasing by only 1% in pre-market trading, while shares have decreased by 21% over the past year, indicating skepticism from investors [3] Group 2: Company Structure Post-Split - The new structure will consist of Global Taste Elevation Co., which includes higher-growth brands like Heinz and Kraft Mac & Cheese, and North American Grocery Co., focusing on U.S. staples like Oscar Mayer and Kraft Singles [4] - Pre-split, Kraft Heinz was trading at approximately 1.3× sales, lower than competitors like Mondelez (2.3×) and Kellanova (2.2×), but slightly above Conagra (1.0×) and Campbell Soup (1.1×) [5] Group 3: Financial Projections - Management anticipates a 60/40 revenue split between the two new entities, projecting Global Taste to generate around $16 billion and North American Grocery about $11 billion based on a 2024 run rate of $27 billion [6][7] - If Global Taste achieves Mondelez-like multiples of 2.0–2.3× revenue, its market cap could reach $32–$36.8 billion, while North American Grocery might trade at 1.0–1.1×, resulting in a combined value of $43–$49 billion, compared to Kraft Heinz's current valuation of $33 billion [7] Group 4: Market Considerations - The market typically does not assign top-tier multiples to both halves of a breakup; if Global Taste trades at 1.6–1.8× and North American Grocery at 1.0×, the total value could drop to $37–$40 billion [8] - The success of the split hinges on the ability of both companies to achieve consistent growth and restore investor confidence, with proponents viewing it as a chance for independent valuation and skeptics fearing it may expose deeper structural issues [9]
Kraft Heinz to split into two companies
CNBC· 2025-09-02 10:38
Company Overview - Kraft Heinz will split into two companies, reversing much of the $46 billion merger from a decade ago that created one of the largest food companies globally [1] - The split aims to enhance capital allocation, prioritize initiatives, and drive scale in promising areas, according to Miguel Patricio, executive chair of the board [4] New Company Structure - The first new company will focus on shelf-stable meals, including brands like Heinz, Philadelphia, and Kraft mac and cheese, projected to have $15.4 billion in net sales for 2024, with approximately 75% of sales from sauces, spreads, and seasonings [2] - The second new company will consist of a "scaled portfolio of North America staples," including Oscar Mayer, Kraft singles, and Lunchables, with an estimated $10.4 billion in net sales for 2024 [3] Historical Context - The merger that created Kraft Heinz in 2015 was initiated by Berkshire Hathaway and 3G Capital, initially well-received by investors, but faced challenges as U.S. sales declined [4] - The company faced significant issues, including a subpoena from the SEC regarding accounting policies, a 36% dividend cut, and a $15.4 billion write-down on major brands [5] - Following these challenges, Kraft Heinz underwent leadership changes, additional write-downs, and divestitures of certain business units, including its cheese unit and nuts division [6] Industry Trends - The split aligns with a broader trend in the food industry, where companies are pursuing breakups to divest from slower-growth categories and enhance investor appeal [7] - Other companies, such as Keurig Dr Pepper and Kellogg, have also pursued similar strategies to separate their business units for better performance [7]