The Kraft Heinz Company (NASDAQ:KHC) traded flat Wednesday after the packaged food giant hit pause on its planned corporate separation, unveiled a $600 million growth push, and issued a 2026 outlook that fell well short of Wall Street expectations.
Investors reacted cautiously as the company signaled increased spending to revive growth while navigating continued pressure in its core U.S. business.
Quarterly Metrics
The company reported fourth-quarter adjusted earnings per share of 67 cents (down 20.2% year over year), beating the analyst consensus of 61 cents. Quarterly sales of $6.354 billion missed the Street view of $6.376 billion.
Net sales declined 3.4%, while organic net sales fell 4.2% during the period.
Gross profit margin declined by 150 basis points to 32.6%, while adjusted gross profit margin decreased by 130 basis points to 33.1%.
Operating income totaled $1.1 billion, while adjusted operating income came in at $1.2 billion, down 15.9%.
North America sales fell 5.4% to $4.70 billion, while International Developed Markets gained 1.8% to $930 million. Emerging Markets sales gained 4.3% to $724 million.
The company declared a regular quarterly dividend of 40 cents per share of common stock payable on March 27, 2026, to stockholders of record as of March 6, 2026.
Pauses Separation Plan
Kraft Heinz CEO Steve Cahillane said he joined the company to modernize its iconic brands, better serve consumers, and create long-term shareholder value, but has since realized “the opportunity is larger than expected” and that many of the company’s challenges are “fixable and within our control.”
He emphasized that his top priority is restoring profitable growth, adding that the company will pause work related to its planned separation to ensure resources are fully aligned with executing its operating plan and to avoid related dis-synergies this year.
To accelerate momentum, particularly in its Taste Elevation portfolio and to support a U.S. business recovery, Kraft Heinz is launching a $600 million investment across marketing, sales, R&D, product improvements, and selective pricing actions.
Cahillane said the company’s strong balance sheet and robust free cash flow provide the flexibility to fund these initiatives while continuing to generate excess cash, expressing confidence that the investment will “accelerate our return to profitable growth.”
Board Chair John T. Cahill endorsed the move, saying the company is already benefiting from Cahillane’s experience in brand-building and large-scale transformations. He added that pausing the separation effort to focus squarely on growth creates “a clear glidepath back to profitable growth” and positions Kraft Heinz well for the road ahead.
Outlook
Kraft Heinz guides fiscal year 2026 adjusted EPS to $1.98-$2.10, well below $2.50 Street estimate.
The company expects organic net sales to fall 1.5% to 3.5% year over year, including an approximate 100-basis-point hit from incremental SNAP headwinds.
It also expects constant-currency adjusted operating income to decline 14% to 18% as it invests about $600 million more in marketing, sales, R&D, product superiority and pricing.
KHC Price Action: Kraft Heinz shares were up 0.10% at $24.92 at the time of publication on Wednesday, according to Benzinga Pro data.
Photo via Shutterstock
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