Kraft Heinz's first quarter results for 2025 were shaped by ongoing volume declines and increased investment in its brands amid a shifting consumer landscape. Management pointed to decreased sales volumes and softer demand in key categories as primary headwinds, but also highlighted continued efforts to renovate products and increase marketing spend. CEO Carlos Abrams-Rivera noted that, while improvements in brand quality and product innovation are underway, they are not yet evident in the financial results. He emphasized, "our commitment to making the necessary investments to deliver quality and value offerings to our consumers is unwavering."
Is now the time to buy KHC? Find out in our full research report (it’s free).
Kraft Heinz (KHC) Q1 CY2025 Highlights:
- Revenue: $6 billion vs analyst estimates of $6.02 billion (6.4% year-on-year decline, in line)
- Adjusted EPS: $0.62 vs analyst estimates of $0.60 (3% beat)
- Adjusted EBITDA: $1.43 billion vs analyst estimates of $1.42 billion (23.8% margin, 0.8% beat)
- Management lowered its full-year Adjusted EPS guidance to $2.59 at the midpoint, a 3.5% decrease
- Operating Margin: 19.9%, in line with the same quarter last year
- Organic Revenue fell 4.7% year on year (-0.5% in the same quarter last year)
- Sales Volumes fell 5.6% year on year (-3.2% in the same quarter last year)
- Market Capitalization: $30.54 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 Kraft Heinz’s Q1 Earnings Call
- Andrew Lazar (Barclays) asked if the larger guidance cut reflects a new approach to investment. CEO Carlos Abrams-Rivera said the company is "playing offense with discipline," expanding the brand growth system to 40% of the business.
- Yasmeen Wandi (Bank of America) questioned whether North America volumes need to turn positive to hit guidance. CEO Abrams-Rivera clarified that the outlook does not require positive volume in any quarter.
- Tom Palmer (Citi) inquired about the impact of tariffs and commodity inflation on cost of goods sold. CFO Andre Maciel explained that most cost increases are expected in the second half, with mitigation efforts underway.
- David Palmer (Evercore ISI) asked about promotional activity compared to peers. Abrams-Rivera responded that the company remains selective, investing in promotions only during key consumer periods instead of chasing short-term volume.
- Chris Carey (Wells Fargo) sought clarity on Q2 gross margin pressure and market share trends. Abrams-Rivera cited higher promotional activity, hedge losses, and commodity peaks as temporary headwinds, but pointed to progress in "accelerate" businesses like cream cheese and ready-to-eat meals.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the effectiveness of Kraft Heinz’s increased marketing and product renovation initiatives on consumer demand, (2) the company’s ability to manage input cost inflation and the timing of tariff impacts, and (3) whether international and emerging market performance can offset ongoing softness in North America. Progress in executing the brand growth system and margin stabilization will also be key signposts.
Kraft Heinz currently trades at $25.88, down from $28.79 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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