Kraft Heinz’s third quarter was marked by ongoing challenges as the company faced falling sales volumes and persistent weakness in consumer sentiment. Management attributed these trends to cautious spending across key markets and highlighted that promotional investments and product renovations have not yet delivered a volume rebound. CEO Carlos Abrams-Rivera acknowledged the difficulties, stating, “the operating environment remains challenging with worsening consumer sentiment and ongoing inflation influencing buying behavior around the world.” The negative market reaction reflected concerns about continued softness in demand and the effectiveness of recent initiatives to stabilize performance.
Is now the time to buy KHC? Find out in our full research report (it’s free for active Edge members).
Kraft Heinz (KHC) Q3 CY2025 Highlights:
- Revenue: $6.24 billion vs analyst estimates of $6.26 billion (2.3% year-on-year decline, in line)
- Adjusted EPS: $0.61 vs analyst estimates of $0.58 (5.5% beat)
- Adjusted EBITDA: $1.36 billion vs analyst estimates of $1.37 billion (21.7% margin, 1.3% miss)
- Management lowered its full-year Adjusted EPS guidance to $2.54 at the midpoint, a 2.1% decrease
- Operating Margin: 16.4%, up from -1.6% in the same quarter last year
- Organic Revenue fell 2.5% year on year vs analyst estimates of 2.2% declines (29.3 basis point miss)
- Sales Volumes fell 3.5% year on year, in line with the same quarter last year
- Market Capitalization: $28.61 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Kraft Heinz’s Q3 Earnings Call
- Andrew Lazar (Barclays) asked whether the profit revision was due to increased brand investment or volume pressures. CFO Andre Maciel clarified that the revision reflected lower U.S. consumption and elongated recovery in Taste Elevation, not additional marketing spend.
- Peter Galbo (Bank of America) inquired about potential changes to the separation strategy based on investor feedback. CEO Carlos Abrams-Rivera reiterated that the decision to split was designed to unlock shareholder value, but adjustments could be made if they create more value.
- Thomas Palmer (JPMorgan) questioned emerging market trends, specifically Indonesia’s impact. Abrams-Rivera and Maciel explained that while Indonesia remains a drag, other emerging markets are accelerating, and corrective actions are underway in Indonesia.
- David Palmer (Evercore ISI) asked about the lack of volume improvement despite increased promotional spending. Maciel noted that promotional return on investment has been low and that inventory reductions by retailers are further dampening results.
- John Baumgartner (Mizuho Securities) pressed on promotional effectiveness and future changes. Management outlined plans to test new tactics, such as increased frequency and customized cross-merchandising, but acknowledged that current results have been mixed.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will track (1) progress on volume stabilization and category recovery in challenged segments such as meat, coffee, and Indonesia, (2) signs of improved return on promotional and marketing investments, and (3) updates on the planned business separation, including formal management appointments and capital structure decisions. Additionally, operational adjustments in supply chain and inventory management will be key indicators of the company’s ability to regain momentum.
Kraft Heinz currently trades at $24.26, down from $25.54 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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