Oscar Mayer And Jell-O Maker Kraft Heinz Feels Macro Economic Pinch, Cuts Profit Outlook

On Tuesday, Kraft Heinz Company KHC reported its first-quarter 2025 earnings. The company houses popular brands like Oscar Mayer, Jell-O, Heinz Ketchup, lunchables and philadelphia cream cheese.

The food giant reported a sales decline of 6.4% year-on-year to $5.99 billion, missing the analyst consensus estimate of $6.02 billion. Adjusted EPS of $0.62 beat the consensus estimate of $0.60.

Sales in North America declined by 7%, and International Developed Markets dropped by 4.4%. Organic net sales fell 4.7%.

Also Read: Domino's Pizza Q1 Operating Margin Shrinks As Lower-Income Consumers Feel the Pinch

Gross profit decreased by 8% to $2.06 billion, with the margin contracted 60 points to 34.4%. The operating income for the quarter dropped 8.1% to $1.2 billion.

Selling, general and administrative expenses, declined 7.7% to $868 million.

As of March 29, Kraft Heinz held $2.11 billion in cash and equivalents. Year-to-date operating cash flow totaled $0.7 billion, with free cash flow of $0.5 billion.

As of March 29, the company had remaining authorization to repurchase approximately $1.7 billion of common stock under the publicly announced share repurchase program. 

"We're closely monitoring the potential impacts from macro-economic pressures such as tariffs and inflation, and we are dedicated to increasing investments to drive product and brand superiority to deliver more value for our consumers," said CEO Carlos Abrams-Rivera.

"As the operating environment remains volatile, we are lowering our full-year outlook and expanding the range of our expectations to better reflect potential outcomes."

Kraft Heinz declared a regular quarterly dividend of $0.40 per share of common stock payable on June 27, 2025, to stockholders of record as of May 30, 2025.

Outlook: Kraft Heinz lowered the FY25 adjusted EPS outlook from $2.63 – $2.74 to $2.51 – $2.67 versus an estimate of $2.67.

The company sees FY25 organic net sales to be down 1.5% to 3.5% versus the prior year.

Price Action: KHC shares closed higher by 0.21% to $28.87 on Tuesday.

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