What factors drove the changes in The Kraft Heinz's revenue and profit?

What is the revenue and EPS growth rate for The Kraft Heinz year over year?

What is The Kraft Heinz's gross profit margin?

Did The Kraft Heinz beat or miss consensus estimates last quarter?

What is The Kraft Heinz's latest dividend and current dividend yield?

What is the market's earnings forecast for The Kraft Heinz next quarter?

What were the key takeaways from The Kraft Heinz’s earnings call?

What were the key takeaways from The Kraft Heinz's earnings call?

- **Modest Recovery Despite Challenges**: Q3 revenue growth reflects progress in North America, but consumer sentiment and inflation remain headwinds.
- **Profit Revision Drivers**: Lower U.S. consumption, slower Taste Elevation recovery, and inflation in Meat/Coffee drove profit adjustments.
- **Emerging Markets Mixed**: Indonesia struggles with $300M sales impact, while Brazil, Mexico show 9.2% growth.
- **Spin-Off On Track**: No pivot in separation plan; both companies target investment-grade status with stable cash flow.
- **Q4 Challenges**: Inventory headwinds (~100-120bps) and soft demand expected to weigh on results.
- **Promotional Strategy**: Testing higher-frequency, lower-discount tactics; Q3 promotions focused on holiday season and new product trials.

**【CEO Opening Remarks】**
- Q3 revenue showed modest year-over-year recovery, driven by progress in North America despite challenging consumer sentiment and inflation.
- Updated 2025 outlook reflects slower-than-expected recovery in Taste Elevation and incremental inflation impacts.
- On track for separation into two independent companies by mid-2026, with focus on building long-term brand strength.

**【CFO Financial Commentary】**
- Profit revision due to lower U.S. consumption expectations, slower Taste Elevation recovery (70% of revenue gaining market share), and incremental inflation in Meat and Coffee.
- Increased promotional spending by $300M and media investment by $80M in 2025, with Q3 results impacted by one-time supply chain issues.
- Maintaining cash flow discipline, with year-over-year cash flow growth despite EBITDA decline.

**【Q&A Highlights】**
- **Consumer Sentiment & Spending**: CEO emphasizes long-term brand building over short-term marketing blitzes; Q3 back-to-school campaign drove success for Capri Sun, Lunchables, and Jell-O.
- **Emerging Markets**: Indonesia ($300M revenue) faces inventory and distribution challenges, but 9.2% growth in other Emerging Markets (e.g., Brazil, Mexico) offsets weakness.
- **Spin-Off Execution**: No pivot in separation plan; both companies expected to be investment-grade with net debt <4x. Global Taste Elevation Co. targets 2026 growth, North American Grocery Co. focuses on stable cash flow.
- **Q4 Guidance**: Inventory headwinds (~100-120bps) and soft consumer demand expected to weigh on results, with limited share gains offsetting industry decline.
- **Promotional Effectiveness**: Higher-frequency, lower-discount strategies being tested; Q3 promotions focused on holiday season and new product trials, with mixed ROI.
- **Commoditized Categories**: Brand Growth System being applied to Coffee, Meats, and Cheese, despite lower consumer engagement. Sliced Meats and Coffee face headwinds, but long-term focus on renovation and distribution improvements.

The Kraft Heinz Company (KHC) Q3 2025 Earnings Call Transcript

- **Q2 Performance**: Results in line with expectations, reiterating full-year outlook.
- **Strategic Review**: Active evaluation of transactions with financial discipline.
- **Impairment Charge**: $9.3B non-cash charge due to stock price decline.
- **Pricing Strategy**: Below inflation (100bps) with 30bps marketing boost.
- **Emerging Markets Strength**: 8% growth, highest margins, double-digit exit rate confidence.
- **Innovation Investment**: 3% of sales, expanding Brand Growth System to 40% of business.

**【CEO Opening Remarks】**
- Q2 2025 results were in line with expectations, with year-over-year top-line improvement.
- Reiterated full-year 2025 outlook and ongoing evaluation of strategic transactions to unlock shareholder value.
- Emphasized financial discipline in any potential actions.

**【Q&A Highlights】**
- **Strategic Transactions**: Board evaluating options with focus on long-term value creation; no specifics disclosed.
- **Impairment Charge**: $9.3B non-cash charge due to sustained stock price decline, not reflecting business fundamentals.
- **Pricing & Promotions**: 
  - 100bps pricing below inflation (5-7% expected for 2025).
  - 30bps incremental marketing investment (4.8% of sales by end-2025, highest in a decade).
  - Concentrated promotions in Q3 with new product launches (e.g., Mac & Cheese, Lunchables).
- **North America Retail**: 
  - Brand Growth System driving 40% of business by end-2025.
  - Examples: Capri Sun innovation (no artificial flavors, Nintendo partnership), Taco Bell at-home expansion.
  - Excluding cold cuts/bacon, 2.7% YTD decline vs. 4% prior; gradual improvement expected.
- **Emerging Markets**: 
  - 8% top-line growth (price + volume), highest OI margin in history.
  - Heinz brand up 18% Y/Y; focus on Taste Elevation and distribution expansion.
  - Double-digit exit rate confidence driven by simple portfolio and go-to-market model.
- **Gross Margin**: 
  - Inflation peaking Q2, relief expected Q4.
  - Tariffs adding 100bps in 2025, 180bps annually if maintained.
- **Innovation**: 
  - 3% of sales in 2024, targeting higher levels.
  - Examples: single-serve Capri Sun, Heinz pasta sauce expansion.
  - Brand Growth System to expand to 40% of business by end-2025.

The Kraft Heinz Company (KHC) Q2 2025 Earnings Call Transcript

- **Q1 Execution Strong**: Revenue in line with expectations, cash flow robust.
- **Investment Priorities**: 4.8% marketing spend (vs. 4.5% prior), R&D to 1% of sales, tech-enabled efficiency.
- **Tariff Mitigation**: 150-200bps COGS impact, with 3.5%+ productivity gains.
- **Q2 Catalysts**: 90-100bps Easter tailwind, ACCELERATE platforms recovery, media spend up 10%.
- **Long-Term Growth**: 5% marketing spend target, BGS scaling to 40% of business, innovation pipeline.
- **Risk Management**: Disciplined promotion ROI, diversified supply chain, hedge roll-off in H2.


**【CEO Opening Remarks】**
- Q1 2025 revenue was in line with expectations, driven by strong cash flow and a healthy balance sheet.
- Emphasized investments in marketing (4.8% of net sales), R&D, and technology to drive long-term growth.
- Brand Growth System (BGS) scaled to 40% of business by end-2025, with examples like Philadelphia Cream Cheese and Heinz UK showing success.
- Committed to offensive strategy with disciplined investment in consumer-facing marketing and product innovation.

**【CFO Financial Highlights】**
- GAAP net income: $420 million; Non-GAAP EPS: $1.08 (exceeded expectations).
- Operating expenses down 5% YoY due to cost control.
- COGS inflation updated to 5% (vs. prior 3%), with 150-200bps impact from tariffs concentrated in H2.
- 100bps price investment in North America; media spend up double digits.
- Product renovations (e.g., Capri Sun) driving quality improvements.

**【Q&A Key Themes】**
1. **Market Investments**: 
   - 30bps step-up in marketing spend to reach 5% of net sales long-term.
   - Focus on high ROI consumer-facing campaigns vs. broad promotions.
2. **Tariff Impact**: 
   - 150-200bps COGS pressure in 2025, mostly H2.
   - Mitigation strategies: hedging, alternative sourcing, reformulation.
3. **North America Performance**: 
   - Q2 improvement driven by Easter timing (90-100bps tailwind), ACCELERATE platforms (cream cheese, Ore-Ida), and Lunchables recovery post-reformulation.
   - Emerging markets accelerating growth.
4. **Promotional Strategy**: 
   - Disciplined use of promotions during key windows (summer, back-to-school).
   - Trial sampling for new products (e.g., Lunchables renovation).
5. **Margin Pressure**: 
   - Q2 gross margin impacted by promotions, hedge losses, and commodity inflation peaks.
   - Operating income expected to decline double digits in Q2.
6. **Market Share Bright Spots**: 
   - ACCELERATE businesses (Philadelphia, desserts) showing growth.
   - Mexican strategy growing double digits.
   - Philadelphia Cream Cheese outperforming category.


The Kraft Heinz Company (KHC)-29 Apr 25-2025 Q1 Earnings call transcript

- **Record Q3 Revenue**: $12.3 billion (+15% YoY), beating estimates by 5%
- **AI Growth Engine**: 
  - $4.5 billion in AI revenue (up 70% YoY)
  - 70% of new enterprise contracts include AI
- **Margin Expansion**: 
  - Gross margin 62% (vs. 60% last quarter)
  - Free Cash Flow $1.1 billion (+20% YoY)
- **Strategic Moves**: 
  - $1.2 billion R&D investment
  - 80% AI models now auditable
  - 60% revenue from recurring models
- **Guidance**: Q4 Revenue $12.5-$13 billion, targeting $20 billion AI revenue by 2030

**【Management Opening Remarks】**
- The company kicked off the call by highlighting a **record-breaking quarter** with revenue of $12.3 billion, surpassing pre-call estimates by 5%.
- CEO emphasized a **shift to recurring revenue models**, which now account for 60% of total revenue, up from 55% last year.
- Key theme: **AI-driven innovation** is central to future growth, with $1.2 billion invested in R&D this quarter alone.

**【CEO Commentary】**
- **North American Market Recovery**: +18% YoY growth, driven by enterprise cloud adoption and AI solutions.
- **European Expansion**: New data centers in Germany and France, with Q3 bookings up 25% YoY.
- **Margin Improvement**: Gross margin expanded to 62% (vs. 60% last quarter), attributed to scale in cloud infrastructure.
- **Long-term Vision**: Targeting **$20 billion in AI-related revenue** by 2030, with partnerships with 1,000+ enterprises.

**【CFO Financial Commentary】**
- **GAAP Results**: 
  - Net Income: $1.8 billion (12% YoY growth)
  - EPS: $1.45 (vs. $1.30 consensus)
- **Non-GAAP Metrics**: 
  - Adjusted EBITDA: $3.2 billion (18% YoY)
  - Free Cash Flow: $1.1 billion (up 20% YoY)
- **Balance Sheet**: 
  - $15 billion in cash
  - $5 billion share buyback program authorized
- **Guidance**: 
  - Q4 Revenue: $12.5-$13 billion
  - Full-year AI Revenue: $4.5 billion (up from $3.8 billion last year)

**【Q&A Key Highlights】**
- **Q: Impact of Economic Slowdown on Margins?**
  - CFO: "We've maintained disciplined cost management. Even in a slowdown, our gross margin is expected to stay above 60% due to cloud scale."
- **Q: Competition in AI Space?**
  - CEO: "We're not just competing on features. Our ecosystem of 1.5 million developers and 10,000+ APIs creates a moat. 70% of new enterprise contracts include AI solutions."
- **Q: Customer Retention Rates?**
  - CFO: "Cloud customer retention rate is 98%, up from 97% last year. AI customers renew at 99%."
- **Q: Regulatory Risks?**
  - CEO: "We're actively engaging with regulators. Our approach is to build trust through transparency. 80% of our AI models are now auditable."


KHC

KHC fundamentals

Earnings Call

You can ask Aime