Kraft Heinz Q1 2025 Earnings Summary

Financial Highlights
- Net sales declined 6.4% year-over-year to $6.0 billion.
- Organic Net Sales decreased 4.7% year-over-year, reflecting a 0.9% positive price impact but a 5.6% decline in volume/mix.
- Gross profit margin declined 60 basis points to 34.4%; Adjusted Gross Profit Margin decreased 10 basis points to 34.4%.
- Operating income fell 8.1% to $1.2 billion; Adjusted Operating Income fell 5.2% to $1.2 billion.
- Diluted EPS dropped 10.6% to $0.59; Adjusted EPS fell 10.1% to $0.62.
- Net income attributable to common shareholders decreased 11.1% to $712 million.

Cash Flow and Capital Returns
- Net cash provided by operating activities was $720 million, down 6.6% year-over-year.
- Free Cash Flow increased 1.0% to $482 million.
- Year-to-date, Kraft Heinz returned $702 million to shareholders: $477 million via dividends and $225 million through share repurchases.
- Remaining authorization for share repurchases stands at approximately $1.7 billion.

Segment Performance
- North America net sales declined 7.0%; Organic Net Sales fell 6.5%.
- International Developed Markets net sales declined 4.4%; Organic Net Sales fell 1.7%.
- Emerging Markets net sales declined 4.7%, but Organic Net Sales rose 3.9%.

Guidance Update (Lowered)
- 2025 Organic Net Sales expected to decline between 1.5% and 3.5% year-over-year.
- Constant Currency Adjusted Operating Income expected to decline between 5% and 10%.
- Adjusted EPS forecast between $2.51 and $2.67.
- Free Cash Flow expected to be flat compared to 2024.
- Expecting approximately a 26% effective tax rate in 2025, reflecting global minimum tax regulations' impact.

Management Commentary
CEO Carlos Abrams-Rivera stated that Kraft Heinz delivered results in line with top-line expectations despite a challenging environment. The company remains focused on investing in brands and efficiencies but has lowered its full-year guidance due to continued macroeconomic pressures, such as tariffs, inflation, and Easter timing shifts impacting volume.

The Kraft Heinz Company (Nasdaq: KHC) announced that the Company’s Board of Directors declared a regular quarterly dividend of $0.40 per share of common stock payable on June 27, 2025, to stockholders of record as of May 30, 2025.

Kool-Aid and Nike Launch Sneaker Collaboration Featuring Ja Morant

Kraft Heinz announced a colorful collaboration between its iconic Kool-Aid brand and Nike, unveiling the Nike x Kool-Aid Ja 2 sneaker collection. Inspired by NBA star Ja Morant’s childhood memories and favorite Kool-Aid flavors, the limited-edition sneakers combine nostalgia, sneaker culture, and vibrant self-expression.

The collaboration’s first sneaker drop, set for May 16 via the SNKRS app and select retailers, features a bold two-tone gradient in Blue Raspberry, Cherry, Orange, and Lemon Lime. It includes playful design elements like the Kool-Aid Man, the phrase “Ohhh Yeah!,” Ja’s “12 AM” text, and a glow-in-the-dark outsole. A second drop in July will spotlight Kool-Aid’s signature red and continue the line’s energetic theme.

In conjunction with the launch, Kool-Aid will release its first new flavor pack in over five years. The Mix n’ Kicks combo lets fans combine four classic flavors to match the sneakers’ mix-and-match concept. Fans can also enter to win themed dubraes and laces to personalize their shoes.

The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz”) will release its first quarter 2025 financial results on Tuesday, April 29, 2025. A press release and supplemental materials, including a pre-recorded management discussion, will be issued before the market opens. Kraft Heinz management will then host a live question-and-answer session with analysts beginning at 9:00 a.m. Eastern Daylight Time.

The earnings release, supplemental materials, and audio of Kraft Heinz’s question-and-answer session can be accessed at ir.kraftheinzcompany.com. A replay will be available following the event through the same website.

The Kraft Heinz Company announced the issuance of senior notes in both USD and Euro denominations.

On February 25, 2025, its subsidiary, Kraft Heinz Foods Company, issued $500 million in 5.200% Senior Notes due 2032 and $500 million in 5.400% Senior Notes due 2035, both guaranteed by The Kraft Heinz Company. These notes were issued under an effective shelf registration statement and pursuant to a Twelfth Supplemental Indenture.

Additionally, Kraft Heinz Foods Company issued €600 million in 3.250% Senior Notes due 2033, also guaranteed by The Kraft Heinz Company. These notes were issued under a Thirteenth Supplemental Indenture.

The proceeds from these offerings will be used for general corporate purposes, potentially including debt repayment. The company entered into underwriting agreements with major financial institutions such as Citigroup, Deutsche Bank, J.P. Morgan, and Wells Fargo for the USD notes, and with Citigroup Global Markets Limited, Deutsche Bank AG, Goldman Sachs, and J.P. Morgan Securities for the Euro notes.

Legal opinions regarding the validity of these notes were provided by McGuireWoods LLP and Gibson, Dunn & Crutcher LLP.

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