KHC
DefensiveKraft Heinz
Price Chart
Market Data
Financials
XBRL · SEC EDGAR2014–2025(12yr)| Metric | FY 2014 | FY 2016 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $10.9B | $18.3B | $26.3B | $26.1B | $26.3B | $25.0B | $26.2B | $26.0B | $26.5B | $26.6B | $25.8B | $24.9B | -3.5% |
| Gross Profit | $3.3B | $5.8B | $9.6B | $9.7B | $8.9B | $8.1B | $9.2B | $8.7B | $8.1B | $8.9B | $9.0B | $8.3B | -7.3% |
| Gross Margin | 30.0% | 31.4% | 36.4% | 37.2% | 34.0% | 32.6% | 35.0% | 33.3% | 30.7% | 33.5% | 34.7% | 33.3% | -1.4pp |
| Operating Income | $1.6B | $2.6B | $6.1B | $6.8B | -$10.2B | $3.1B | $2.1B | $3.5B | $3.6B | $4.6B | $1.7B | -$4.7B | -377.4% |
| Operating Margin | 14.4% | 14.4% | 23.4% | 26.0% | -38.9% | 12.3% | 8.1% | 13.3% | 13.7% | 17.2% | 6.5% | -18.7% | -25.2pp |
| Net Income | $657.0M | $634.0M | $3.6B | $11.0B | -$10.2B | $1.9B | $356.0M | $1.0B | $2.4B | $2.9B | $2.7B | -$5.8B | -313.0% |
| Net Margin | 6.0% | 3.5% | 13.8% | 42.2% | -38.8% | 7.7% | 1.4% | 3.9% | 8.9% | 10.7% | 10.6% | -23.4% | -34.1pp |
| Free Cash Flow | $1.7B | $1.8B | $4.0B | -$690.0M | $1.7B | $2.8B | $4.3B | $4.5B | $1.6B | $3.0B | $3.2B | $3.7B | +15.9% |
| FCF Margin | 15.9% | 9.9% | 15.2% | -2.6% | 6.7% | 11.1% | 16.5% | 17.1% | 5.9% | 11.1% | 12.2% | 14.7% | +2.5pp |
| EPS (Diluted) | $-0.17 | $-0.34 | $2.81 | $8.95 | $-8.36 | $1.58 | $0.29 | $0.82 | $1.91 | $2.31 | $2.26 | $-4.93 | -318.1% |
1. THE BIG PICTURE
Kraft Heinz is currently a business in retreat, forced to pivot from a planned structural separation to a defensive reinvestment phase as its "transformation" fails to protect the bottom line. Despite its massive global scale, Kraft Heinz is struggling to maintain the value of its brands, evidenced by a -$6.79 billion net income and nearly $60 billion in intangible assets that remain vulnerable to further impairment (XBRL).
2. WHERE THE RISKS HIT HARDEST
Kraft Heinz’s primary strength—its centralized procurement and global scale—is being neutralized by the growing power of retail customers and private-label competition. This scale is intended to provide "favorable pricing" (10-K Item 1), but retail consolidation has instead restricted Kraft Heinz's ability to pass on inflationary costs, directly threatening its net sales and profitability. Furthermore, the "iconic" status of its brand portfolio is being fundamentally questioned by the markets; the $9.3 billion impairment loss recorded in 2025 shows that the carrying value of these trademarks is highly sensitive to even minor shifts in consumer preference or pricing pressure (10-K Item 1A).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a stark disconnect between cash generation and accounting profitability. While Kraft Heinz maintains a strong Free Cash Flow margin of 13.4%—ranking second among its peer group—its TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter operating margin has collapsed to -23.4% (XBRL). This discrepancy is largely due to massive non-cash impairment charges, but the underlying operational trend is equally concerning: organic net sales fell 4.2% in the most recent quarter, driven by a 4.7% drop in volume/mix (8-K). This volume decline is structural rather than temporary, as evidenced by management’s guidance that organic sales will continue to fall by as much as 3.5% in 2026. Sentiment is notably poor, with short interest sitting at 9.0% of the float, suggesting that a significant portion of the market is betting against a successful turnaround (Yahoo Finance).
4. IS IT WORTH IT AT THIS PRICE?
At a forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 11.0x, Kraft Heinz trades at a 34% discount to the peer median of 16.8x. According to the provided sensitivity analysis, a long-term growth rate of just 0.5% would justify a much higher multiple of 24.7x (CAPM analysis). The current 11.0x multiple suggests the market is pricing in a permanent and significant contraction of the business. This deep discount is justified by Kraft Heinz's negative earnings and its 5.1x net leverage, which is high compared to its annual FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders (XBRL). While the 6.5% dividend yield is the highest in the peer group, it may be viewed by investors as a compensation for the risk of further brand devaluations and the $1.2 billion in potential IRS penalties (10-K Item 1A).
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if volume/mix trends in North America turn positive, signaling that the $600 million investment in marketing and R&DR&DResearch & Development — spending on creating new products or technologies is successfully defending market share against private labels.
- Cautious if the IRS transfer pricing dispute results in a liability exceeding the proposed $1.2 billion, or if the "reporting units" with low fair-value cushions trigger another round of multi-billion-dollar impairments.
6. BOTTOM LINE
Structural Advantage: Massive scale in centralized procurement and a global distribution network for eight core product platforms. Bottom Line: Kraft Heinz is a high-yield turnaround play where the "transformation" has yet to stop a painful erosion of both sales volumes and asset values.
1. Top 5 Material Risks
- Competitive Pricing and Retail Power: Kraft Heinz faces pressure to reduce prices or limit price increases due to competition from private label products and the consolidation of retail customers. This restricts the ability to offset inflationary cost increases and threatens market share.
- Consumer Preference Shifts: Success depends on accurately predicting rapid changes in consumer tastes, including health and wellness trends. Failure to innovate or distinguish between short-term trends and long-term shifts could lead to declining sales.
- Goodwill and Intangible Asset Impairment: With $59.7 billion in goodwill and intangible assets, Kraft Heinz is exposed to significant impairment risk. Reporting units and brands with 20% or less excess fair value over carrying amount totaled $37.2 billion as of the 2025 annual test.
- Indebtedness and Capital Access: Kraft Heinz carries approximately $20.9 billion in senior notes. High leverage limits financial flexibility, and any credit rating downgrade could increase borrowing costs and restrict access to capital markets.
- Commodity and Input Cost Volatility: Kraft Heinz is exposed to price fluctuations in commodities (dairy, meat, sugar, coffee, oils) and packaging materials. Inability to hedge these costs effectively or pass them on to consumers through pricing actions threatens gross profit and net income.
2. Company-Specific Risks
- Separation Uncertainty: The decision to pause the spin-off of Kraft Heinz into two independent entities creates uncertainty that may divert management attention, increase execution costs, and cause volatility in the trading price of common stock.
- Berkshire Hathaway Influence: As of January 16, 2026, Berkshire Hathaway owns approximately 27.5% of common stock, granting it significant influence over matters requiring stockholder approval, including potential mergers or sales of assets.
- Registration Rights Agreement: Kraft Heinz filed a prospectus supplement on January 20, 2026, to register up to 325,442,152 shares held by Berkshire Hathaway for resale, which may increase stock price volatility and depress market value.
- International Exposure: Approximately 33% of 2025 net sales were generated outside the United States, subjecting Kraft Heinz to risks including foreign currency fluctuations, trade barriers, and geopolitical instability.
3. Regulatory/Legal Risks
- IRS Transfer Pricing Disputes: The IRS has issued Notices of Proposed Adjustment (NOPAs) for 2018–2022 regarding transfer pricing with foreign subsidiaries. The proposed adjustments, including interest and penalties, total approximately $1.2 billion.
- Marketing and Labeling Claims: Kraft Heinz faces litigation alleging that certain products are "ultra-processed" and cause adverse health impacts, which could lead to fines, settlements, or requirements to change operations.
- Sustainability Disclosures: Evolving regulations, such as the EU’s Corporate Sustainability Reporting Directive and California’s climate disclosure requirements, may force significant revisions to sustainability goals and increase compliance costs.
- Data Privacy Compliance: Kraft Heinz is subject to evolving global data protection laws, including GDPR, CCPA, and CPRA, which impose substantial penalties for non-compliance and require significant resources to manage.
4. Financial Impact Map
Competitive Pricing and Retail Power → Net Sales → Retailers demanding lower pricing or shifting to private label products reduces volume and margin. Consumer Preference Shifts → Net Sales → Failure to innovate or meet health/wellness trends leads to loss of market share and reduced product demand. Goodwill and Intangible Asset Impairment → Net Income → Non-cash impairment charges directly reduce earnings, as seen with the $9.3 billion loss in 2025. Indebtedness and Capital Access → Cash Flow from Operations → Significant cash flow must be dedicated to principal and interest payments, reducing funds available for dividends and stock repurchases. Commodity and Input Cost Volatility → Cost of Products Sold → Volatility in raw material prices and hedging derivatives causes fluctuations in gross profit and net income.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Mar 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Kraft Heinz CEO Cahillane Shelves Breakup Plans to Focus on Core Business Turnaround
- ▸CEO Steve Cahillane cancels company breakup plans after six weeks in role
- ▸FY2025 net sales $24.9B, down 3.5% YoY; organic sales fell 3.4%
- ▸FY2025 free cash flow $3.7B, up 15.9% YoY
- ▸Announced $600M investment in commercial levers to drive profitable growth
- ▸GAAP net loss $5.85B for FY2025 due to one-time charges
Kraft Heinz Merger Talks With Unilever Conclude Without Reaching Definitive Agreement
- ▸Merger discussions between Kraft Heinz and Unilever have officially ended
- ▸No deal reached to combine food business portfolios
- ▸KHC forward P/E of 11.30 trades below food industry average of 19.86
- ▸KHC shares currently trading 8% below analyst price target of $24.29
- ▸Company faces risks from high debt levels and dividend coverage concerns
Kraft Heinz Faces Analyst Downgrades and Berkshire Hathaway Potential Share Sale Disclosure
- ▸Morgan Stanley cut FY26 and FY27 EPS estimates by 18%
- ▸Mizuho lowered price target to $25 from $27
- ▸Berkshire Hathaway disclosed potential sale of 325.4M shares
- ▸Eight consecutive quarters of sales declines reported in macaroni and cheese segment
- ▸Announced five-year global condiment partnership with the NFL
Kraft Heinz Secures Five-Year Global NFL Partnership to Boost Condiment Brand Visibility
- ▸Signed five-year global condiment partnership with the NFL
- ▸Launching PowerMac high-protein, high-fiber Mac & Cheese in April 2026
- ▸Held recent, now-concluded merger talks with Unilever regarding food business units
- ▸Projected 2029 financials: $24.9B revenue and $2.8B earnings
- ▸Strategy focuses on brand reinvestment to offset North America volume pressure
McCormick in talks to acquire Unilever food assets including Hellmann's and Knorr
- ▸McCormick and Unilever confirm discussions regarding potential strategic transaction
- ▸Unilever received inbound offer for its food business unit
- ▸Potential deal would combine McCormick spices with Unilever's Hellmann's and Knorr brands
- ▸Unilever food business accounts for approximately 25% of group revenue
- ▸No certainty that a definitive agreement will be reached
Kraft Heinz Q4 revenue $6.35B down 3.4%, misses full-year EPS guidance expectations
- ▸Q4 revenue $6.35B, down 3.4% YoY, in line with estimates
- ▸Full-year EPS guidance missed analyst expectations significantly
- ▸Organic revenue growth missed analyst estimates
- ▸Stock price down 11.1% since earnings report
- ▸Shelf-stable food sector average stock decline 14.1% post-earnings
Kraft Heinz and Unilever held merger talks for food divisions before discussions ended
- ▸Kraft Heinz and Unilever held preliminary merger talks regarding food business units
- ▸Discussions focused on combining Unilever food division with Kraft Heinz condiments business
- ▸Merger talks have officially ended according to Financial Times report
- ▸Kraft Heinz committed $600 million toward internal turnaround efforts
- ▸Kraft Heinz previously paused internal plans to split company into separate entities
Kraft Heinz Q4 revenue $6.35B down 3.4% YoY, misses organic revenue and EPS guidance
- ▸KHC Q4 revenue $6.35B, down 3.4% YoY, in-line with estimates
- ▸KHC full-year EPS guidance missed analyst expectations significantly
- ▸KHC organic revenue missed analyst estimates
- ▸HSY Q4 revenue $3.09B, +7% YoY, beat estimates by 3.8%
- ▸Shelf-stable food sector Q4 revenue beat consensus estimates by 0.5%
Kraft Heinz signs five-year NFL partnership to boost Away From Home food service business
- ▸Five-year global condiment partnership with the NFL
- ▸Includes brands Heinz, Kraft, Velveeta, and Philadelphia
- ▸Aims to drive retail opportunities and Away From Home business growth
- ▸Full-year 2025 organic net sales decreased 3.4%
- ▸Marketing investment increasing to 5.5% of net sales from 4.9%
Kraft Heinz sees unusual call options volume surge following strong Q4 free cash flow
- ▸Q4 free cash flow rose 15.9% despite 3.5% decline in net sales
- ▸Q4 FCF margin reached 18.43% compared to 17.35% in Q4 2024
- ▸Management expects 100% FCF conversion rate for future outlook
- ▸13,440 contracts traded for $23.50 calls expiring March 27
- ▸CEO Steve Cahillane canceled plans to split company into two entities