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.