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Why Is Kraft Heinz (KHC) Up 0.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Kraft Heinz (KHC - Free Report) . Shares have added about 0.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kraft Heinz due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Kraft Heinz Q2 Earnings Beat, Organic Sales Down 2% Y/Y
Kraft Heinz posted second-quarter 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. However, both metrics showed a year-over-year decline. Also, organic sales dipped year over year.
KHC’s Q2 Quarterly Performance: Key Insights
Kraft Heinz posted adjusted earnings of 69 cents per share, beating the Zacks Consensus Estimate of 64 cents. However, quarterly earnings fell 11.5% year over year, mainly due to lower adjusted operating income and increased taxes on adjusted earnings. This was partially offset by fewer shares outstanding.
The company generated net sales of $6,352 million, down 1.9% year over year. The metric beat the Zacks Consensus Estimate of $6,286 million. Net sales include a slight 0.1 percentage point benefit from favorable foreign currency exchange rates. Organic net sales were down 2% year over year. Our model expected a 3.2% dip in organic sales.
Pricing rose by 0.7 percentage points across all reportable segments, primarily due to strategic price increases in certain categories — most notably coffee — to offset higher input costs. However, this was outweighed by a 2.7 percentage point decline in volume/mix, driven mainly by lower sales in North America and International Developed Markets. These declines were partially offset by volume/mix growth in Emerging Markets. The unfavorable volume/mix was mainly attributed to declines in cold cuts, coffee, Lunchables, frozen snacks and powdered beverages.
The adjusted gross profit of $2.17 billion decreased 5.6% from the $2.30 million reported in the year-ago quarter. The adjusted gross margin contracted 140 bps to 34.1%.
Adjusted operating income fell 7.5% year over year to $1.3 billion, primarily due to higher commodity cost inflation, which outweighed gains from efficiency initiatives and negatively impacted volume/mix. These pressures were partially offset by higher pricing, lower selling, general, and administrative expenses (mainly due to reduced advertising), and a modest 0.2 percentage point benefit from foreign currency exchange.
Decoding KHC’s Segment-Wise Results
North America: Net sales of $4.76 billion declined 3.3% year over year. Organic sales fell 3.2%. We expected a 4.9% decline in segment organic sales. During the quarter, pricing moved up 0.2 percentage points, but the volume/mix fell 3.4 percentage points.
International Developed Markets: Net sales of $897 million were up 1.3% year over year. Organic sales declined 2.2%, with pricing moving up 0.7 percentage points and volume/mix dipping 2.9 percentage points, respectively.
Emerging Markets: Net sales of $698 million increased 4.2% year over year. Also, organic sales grew 7.6%. We expected 4.5% growth in segment organic sales. Pricing is up 5.2 percentage points and volume/mix is up 2.4 percentage points.
Kraft Heinz's Other Financial Aspects
Kraft Heinz ended the quarter with cash and cash equivalents of $1.57 billion, long-term debt of $19.3 billion and total shareholders’ equity (excluding noncontrolling interest) of $41.4 billion. Net cash provided by operating activities was $1.93 billion for the six months ended June 28, 2025, and free cash flow was $1.5 billion.
What to Expect From KHC in 2025
For 2025, the company continues to expect organic net sales to decline between 1.5% and 3.5% year over year. Management anticipates organic sales to improve sequentially throughout the year, with pricing expected to contribute flat to slightly positive.
The company continues to project adjusted earnings per share in the range of $2.51 to $2.67.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.25% due to these changes.
VGM Scores
At this time, Kraft Heinz has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kraft Heinz has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Kraft Heinz (KHC) Up 0.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Kraft Heinz (KHC - Free Report) . Shares have added about 0.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kraft Heinz due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Kraft Heinz Q2 Earnings Beat, Organic Sales Down 2% Y/Y
Kraft Heinz posted second-quarter 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. However, both metrics showed a year-over-year decline. Also, organic sales dipped year over year.
KHC’s Q2 Quarterly Performance: Key Insights
Kraft Heinz posted adjusted earnings of 69 cents per share, beating the Zacks Consensus Estimate of 64 cents. However, quarterly earnings fell 11.5% year over year, mainly due to lower adjusted operating income and increased taxes on adjusted earnings. This was partially offset by fewer shares outstanding.
The company generated net sales of $6,352 million, down 1.9% year over year. The metric beat the Zacks Consensus Estimate of $6,286 million. Net sales include a slight 0.1 percentage point benefit from favorable foreign currency exchange rates. Organic net sales were down 2% year over year. Our model expected a 3.2% dip in organic sales.
Pricing rose by 0.7 percentage points across all reportable segments, primarily due to strategic price increases in certain categories — most notably coffee — to offset higher input costs. However, this was outweighed by a 2.7 percentage point decline in volume/mix, driven mainly by lower sales in North America and International Developed Markets. These declines were partially offset by volume/mix growth in Emerging Markets. The unfavorable volume/mix was mainly attributed to declines in cold cuts, coffee, Lunchables, frozen snacks and powdered beverages.
The adjusted gross profit of $2.17 billion decreased 5.6% from the $2.30 million reported in the year-ago quarter. The adjusted gross margin contracted 140 bps to 34.1%.
Adjusted operating income fell 7.5% year over year to $1.3 billion, primarily due to higher commodity cost inflation, which outweighed gains from efficiency initiatives and negatively impacted volume/mix. These pressures were partially offset by higher pricing, lower selling, general, and administrative expenses (mainly due to reduced advertising), and a modest 0.2 percentage point benefit from foreign currency exchange.
Decoding KHC’s Segment-Wise Results
North America: Net sales of $4.76 billion declined 3.3% year over year. Organic sales fell 3.2%. We expected a 4.9% decline in segment organic sales. During the quarter, pricing moved up 0.2 percentage points, but the volume/mix fell 3.4 percentage points.
International Developed Markets: Net sales of $897 million were up 1.3% year over year. Organic sales declined 2.2%, with pricing moving up 0.7 percentage points and volume/mix dipping 2.9 percentage points, respectively.
Emerging Markets: Net sales of $698 million increased 4.2% year over year. Also, organic sales grew 7.6%. We expected 4.5% growth in segment organic sales. Pricing is up 5.2 percentage points and volume/mix is up 2.4 percentage points.
Kraft Heinz's Other Financial Aspects
Kraft Heinz ended the quarter with cash and cash equivalents of $1.57 billion, long-term debt of $19.3 billion and total shareholders’ equity (excluding noncontrolling interest) of $41.4 billion. Net cash provided by operating activities was $1.93 billion for the six months ended June 28, 2025, and free cash flow was $1.5 billion.
What to Expect From KHC in 2025
For 2025, the company continues to expect organic net sales to decline between 1.5% and 3.5% year over year. Management anticipates organic sales to improve sequentially throughout the year, with pricing expected to contribute flat to slightly positive.
The company continues to project adjusted earnings per share in the range of $2.51 to $2.67.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.25% due to these changes.
VGM Scores
At this time, Kraft Heinz has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kraft Heinz has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.