Kraft Heinz tumbles 7% as company pauses split, issues weak guidance

Investing.com - Kraft Heinz Co. (NASDAQ: KHC) shares tumbled 7% on Wednesday after the food giant announced it would pause its planned company separation and issued disappointing 2026 guidance that fell short of analyst expectations.

The maker of Heinz ketchup and Kraft macaroni and cheese reported fourth-quarter adjusted earnings per share of $0.67, beating analyst estimates of $0.61. However, quarterly revenue came in at $6.35 billion, slightly below the $6.38 billion analysts had expected and down 3.4% from the same period last year. Organic sales declined 4.2% in the quarter, worse than the 3.72% drop analysts had anticipated.

The company announced a significant strategic shift, pausing work related to its previously announced plan to separate the business. CEO Steve Cahillane, who recently joined the company, said the focus would instead be on returning to profitable growth. Kraft Heinz unveiled a $600 million investment across marketing, sales, and R&D to drive recovery, particularly in its U.S. business.

"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," Cahillane said. "As a result, we believe it is prudent to pause work related to the separation."

The company’s 2026 outlook disappointed investors, projecting adjusted EPS of $1.98 to $2.10, well below the $2.49 analysts had expected. Kraft Heinz also forecast organic net sales to decline between 1.5% and 3.5%, with adjusted operating profit expected to drop 14% to 18%.

For the full year 2025, Kraft Heinz reported a net loss of $5.85 billion, compared to a profit of $2.74 billion in 2024, primarily due to non-cash impairment losses of $9.3 billion. Adjusted EPS for 2025 was $2.60, down 15% from $3.06 in the previous year.

Volume declines continued to plague the company, with North America organic volume dropping 5.4% in the fourth quarter. The company cited weakness across several categories including cold cuts, coffee, frozen meals, bacon, and condiments.

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