Kraft Heinz Surpasses Revenue Expectations, Reports Q2 Revenue of $6.35 Billion

Kraft Heinz reported Q2 revenue of $6.35 billion, exceeding analysts' forecasts of $6.27 billion. The company's CEO emphasized the essential role of their products in consumers' lives and their commitment to offering high-quality, affordable, and accessible products. Kraft Heinz's revenue growth has faced challenges, with a one-year decline of 2.4%, but the firm has maintained a solid profitability framework and a conservative approach to leveraging.

Kraft Heinz (Nasdaq: KHC) reported its second-quarter (Q2) 2025 financial results, with net sales of $6.35 billion, slightly exceeding analysts' forecasts of $6.27 billion. The company's CEO, Carlos Abrams-Rivera, highlighted the importance of Kraft Heinz's products in consumers' lives and the company's commitment to delivering high-quality, affordable, and accessible products.

The company's organic net sales decreased by 2.0% year-over-year (YoY), driven by a 2.7% decline in volume/mix, partially offset by a 0.7% increase in price. The decline in volume/mix was primarily due to lower sales of cold cuts, coffee, Lunchables, frozen snacks, and powdered beverages. Operating income decreased significantly to a loss of $8.0 billion, primarily due to non-cash impairment losses of $9.3 billion, reflecting a sustained decline in the company's share price and market capitalization.

Despite the challenging Q2 results, Kraft Heinz maintained a solid profitability framework and a conservative approach to leveraging. The company's adjusted operating income decreased by 7.5% YoY to $1.3 billion, driven by increased commodity cost inflation and unfavorable volume/mix. However, the company's free cash flow increased by 28.5% YoY to $1.5 billion, primarily due to favorable improvements in working capital and lower cash outflows from variable compensation.

Kraft Heinz continues to reaffirm its outlook for fiscal year 2025, expecting organic net sales to decrease by 1.5% to 3.5% YoY, constant currency adjusted operating income to decrease by 5% to 10% YoY, and adjusted EPS to range between $2.51 and $2.67. The company expects an effective tax rate of approximately 26% and interest expense of approximately $960 million for the full year.

Kraft Heinz is actively evaluating potential strategic transactions to unlock long-term shareholder value, but there is no assurance that any transaction will occur or its outcome or timing. The company has not set a timetable for completion of this process and does not intend to make any further announcements regarding the process unless and until it determines that further disclosure is appropriate or necessary.

References:
[1] https://news.kraftheinzcompany.com/press-releases-details/2025/Kraft-Heinz-Reports-Second-Quarter-2025-Results-Maintains-Full-Year-2025-Outlook/default.aspx