Kraft Heinz (NASDAQ:KHC) reported third-quarter results that narrowly missed Wall Street’s expectations, as the packaged foods maker continues to grapple with rising costs, soft demand, and a shifting operating landscape ahead of its planned corporate split.
The company posted net sales of $6.24 billion for the quarter ended September 27, down 2.3% year-over-year and slightly below the Bloomberg consensus forecast of $6.25 billion. Higher prices and tariff-driven increases in input costs weighed on results, while volumes in North America, its largest market, declined—particularly in categories such as coffee.
Despite the top-line miss, adjusted earnings per share came in at $0.61, topping expectations of $0.58, supported by cost-control efforts and margin improvements even amid higher taxes and interest expenses.
In September, Kraft Heinz announced plans to separate into two independent companies—one focused on grocery staples and another on sauces and spreads—in a move aimed at sharpening each business’s focus and driving operational efficiency.
CEO Carlos Abrams-Rivera, who will lead the grocery-focused unit after the split, said the separation remains on schedule for completion in the second half of 2026. He reiterated his confidence that the tax-free spin-off will enable both companies to “better focus on resources, improve execution, reduce complexity, and drive further efficiencies.”
The restructuring reflects a growing trend among major consumer goods firms, which are moving away from conglomerate structures amid subdued sales growth, tighter valuations, and margin pressure tied to tariffs and input costs.
However, not all investors are convinced. Warren Buffett, whose Berkshire Hathaway played a key role in the company’s 2015 merger with 3G Capital, has reportedly expressed disappointment with the decision, suggesting the split may not fully address Kraft Heinz’s underlying challenges. Since that merger, the company’s shares have struggled, as inflation and changing consumer habits have weighed on demand.
Kraft Heinz stock fell more than 1% in premarket U.S. trading Wednesday following the results.