The Kraft Heinz 2025 Q1 Earnings Misses Targets as Net Income Declines 11.2%

The kraft heinz Company reported its fiscal 2025 Q1 earnings on April 29, 2025. The food and beverage giant saw a 6.4% year-on-year decline in revenue to $6 billion, slightly missing analyst expectations of $6.02 billion. Adjusted EPS of $0.62, however, surpassed consensus estimates of $0.60. The company has lowered its full-year guidance due to ongoing market pressures, reflecting a cautious outlook amidst volatile economic conditions.

Revenue
The Kraft Heinz Company experienced a 6.4% decline in total revenue, which amounted to $6 billion in Q1 2025, compared to $6.41 billion in Q1 2024. This decrease was driven by various segments: Taste Elevation contributed $2.67 billion, Easy Ready Meals accounted for $1.02 billion, Substantial Snacking generated $395 million, Desserts added $223 million, Hydration provided $502 million, Cheese brought in $400 million, Coffee contributed $220 million, Meats added $473 million, and the Other segment accounted for $99 million.

Earnings/Net Income
Kraft Heinz's earnings per share (EPS) fell by 9.1% to $0.60 in Q1 2025 from $0.66 in the previous year. The company's net income also saw an 11.2% decline, reaching $714 million compared to $804 million in Q1 2024. Overall, the EPS reflects a challenging quarter for the company.

Price Action
The stock price of Kraft Heinz edged down by 0.09% on the latest trading day, dropped by 4.40% over the full trading week, and has decreased by 3.99% month-to-date.

Post-Earnings Price Action Review
Following the earnings report, Kraft Heinz's stock price showed a modest positive response, with a maximum return of 0.36% over a 30-day period. The backtest results suggest that while earnings report metrics such as revenue, net income, and EPS can influence stock prices, the impact tends to be relatively modest. Despite the earnings miss, the stock's reaction underscores the complex interplay between financial results and market sentiment, highlighting the importance of broader economic factors and investor expectations in driving stock performance.

CEO Commentary
Carlos Abrams-Rivera, CEO of Kraft Heinz, commented on the earnings report, stating, "Despite growing market pressure in the first quarter, we delivered top-line results in line with our expectations, with strong cash flow performance and a healthy balance sheet." He reiterated the company's commitment to investing in marketing, R&D, and technology, emphasizing a strategy of disciplined offense. Abrams-Rivera expressed confidence in the brand growth system to identify opportunities and drive investments, while acknowledging the need to monitor market tensions.

Guidance
Kraft Heinz anticipates improved second-quarter top-line growth compared to Q1, driven by Easter timing and emerging market acceleration. The company has revised its guidance to reflect a 100 basis point pricing impact, maintaining marketing investments at around 4.8% of revenue, aiming for 5% long-term. Expectations include a 5% increase in COGS inflation, with gross margin pressure expected in Q2 due to promotional activities and commodity inflation impacts.

Additional News
In recent developments, Kraft Heinz announced a regular quarterly dividend of $0.40 per share, payable on June 27, 2025, to stockholders of record as of May 30, 2025. Additionally, the company has authorized approximately $1.7 billion in share repurchases under its publicly announced share repurchase program. These moves reflect Kraft Heinz's ongoing commitment to returning capital to shareholders amidst a challenging economic environment. The company continues to focus on leveraging its iconic and emerging brands, driving transformation centered around consumer needs, and maintaining a sustainable, ethical impact on global markets.

Ask Aime: Kraft Heinz stock price reaction to Q1 2025 earnings report