Kraft Heinz (NASDAQ:KHC) shares dropped 6.3% on Wednesday after the packaged food maker topped fourth-quarter profit expectations but delivered a weaker-than-anticipated outlook for fiscal 2026, alongside plans for a $600 million push to reignite growth.
For the fourth quarter, the company posted adjusted earnings of $0.67 per share, ahead of the $0.61 analysts had forecast. Revenue, however, came in at $6.35 billion, just shy of the $6.38 billion consensus and down 3.4% from a year earlier. Organic net sales fell 4.2%, as a 4.7 percentage point decline in volume and mix more than offset a modest 0.5 percentage point increase from pricing.
The market reaction centered on the company’s forward guidance. Kraft Heinz expects fiscal 2026 earnings per share between $1.98 and $2.10, significantly below the $2.49 analysts were projecting. It also anticipates organic net sales will decline by 1.5% to 3.5% compared with 2025.
“When I decided to join Kraft Heinz, I knew that this was an exciting opportunity to contemporize iconic brands, better serve consumers and customers, and build meaningful shareholder value,” said CEO Steve Cahillane. “My number one priority is returning the business to profitable growth, which will require ensuring all resources are fully focused on the execution of our operating plan.”
Management said it will halt efforts tied to a previously proposed separation and instead allocate $600 million toward marketing, sales capabilities, research and development, product enhancements, and selective pricing actions. The company expects these investments to weigh on profitability, guiding for a 14% to 18% drop in constant-currency adjusted operating income in 2026.
For full-year 2025, net sales declined 3.5% to $24.9 billion, while organic net sales were down 3.4%. Adjusted operating income fell 11.5% to $4.7 billion, and adjusted earnings per share decreased 15% to $2.60.
Despite the softer top-line performance, Kraft Heinz generated $3.7 billion in free cash flow during 2025, a 15.9% increase year over year, and returned $2.3 billion to shareholders through dividends and share buybacks.