Kraft Heinz confirms split plan, lowers 2025 outlook
Company to divide into two entities, citing economic pressures; third-quarter results show mixed performance
USA – Kraft Heinz Co. confirmed its plan to separate into two public companies while revising down its full-year 2025 financial guidance following weaker third-quarter results.
The split will create Global Taste Elevation Co., which will house brands including Heinz, Philadelphia, and Kraft Mac & Cheese, with 2024 sales of US$15.4 billion, and North American Grocery Co., covering Kraft Singles, Lunchables, and Oscar Mayer, which recorded US$10.4 billion in sales last year.
Chief executive Carlos Abrams-Rivera stated that preparations for the separation are progressing and the transaction is expected to finalize in the second half of 2026, subject to board approval and other closing requirements.
Abrams-Rivera added that dividing the company will allow each entity to focus resources more precisely, streamline operations, and improve efficiency while positioning both for long-term stability.
Kraft Heinz now anticipates adjusted earnings per share of US$2.50 to US$2.57 for 2025, down from an earlier estimate of US$2.51 to US$2.67, and projects an organic net sales decline of 3% to 3.5%, versus a prior range of 1.5% to 3.5%.
Chief financial officer Andre Maciel attributed the lowered forecast to slower growth in emerging markets, particularly Indonesia, as the company addresses distributor network issues, stabilizes inventories, and manages pricing fluctuations.
He also noted that the US retail market is facing continued pressure, reflecting broader consumption trends affecting both Kraft Heinz and the wider industry.
For the third quarter ending September 27, Kraft Heinz reported net income of US$613 million, equivalent to US$0.52 per share, compared with a loss of US$290 million in the same period a year earlier, mainly due to the prior year’s non-cash impairment losses.
Adjusted net earnings fell to US$721 million, or US$0.61 per share, down from US$913 million, or US$0.75 per share, a year earlier, exceeding Wall Street’s forecast of US$0.58 per share.
Third-quarter net sales decreased 2.3% year over year to US$6.24 billion from US$6.38 billion, with organic sales down 2.5%, reflecting a 3.5% drop in volume and mix partially offset by a 1% gain from pricing.
North American net sales fell 3.8% to US$4.64 billion, with volume down 4.2% and pricing up 0.4%, while adjusted operating income dropped nearly 18% to US$1.02 billion due to commodity inflation in meats and coffee.
Abrams-Rivera noted that areas such as Lunchables, cream cheese, and Primal Kitchen contributed to improved year-over-year performance, but categories like macaroni and cheese, spoonables, and frozen snacks continued to see declines.
The company emphasized that 2026 will be critical as it completes the split, focusing on strategic brand investments and operational improvements to support both companies’ long-term prospects.
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