Food and beverage major Kraft Heinz Co. (KHC) reported Wednesday a profit in its third quarter, compared to prior year's loss, with adjusted earnings above market estimates. Meanwhile, net sales dropped from last year and fell below the Street view. Further, the firm trimmed its fiscal 2025 adjusted earnings forecast below market estimates. In the pre-market activity on the Nasdaq, Kraft Heinz shares were losing around 1.8 percent to trade at $25.07.
For fiscal year 2025, the company now expects adjusted earnings per share in the range of $2.50 to $2.57, compared to the previously expected range of $2.51 to $2.67. The Wall Street analysts on average expect the company to report earnings of $2.59 per share. Analysts' estimates typically exclude special items. Organic net sales is now expected to be down 3.0 to down 3.5 percent versus the prior year, compared to the previous expectation of down 1.5 to down 3.5 percent. The revised outlook reflects slower growth in Emerging Markets, driven by continued declines in Indonesia and pressure in U.S. Retail. Constant Currency Adjusted Operating Income is now expected to be down 10 to down 12 percent versus the prior year, compared to the previous expectation of down 5 to down 10 percent. Carlos Abrams-Rivera, CEO of Kraft Heinz, said, "Our third quarter results reflect a modest year-over-year improvement in our top-line performance relative to the first half of the year. While the operating environment remains challenging, we're seeing improvement driven in part by targeted investments we're making to deliver superior and affordable products to our consumers."
The company added that it is on track to separate into two companies in the second half of 2026, expecting the separation to allow each business to better focus resources, improve execution, reduce complexity, and drive further efficiencies.
In the third quarter, the company's net income attributable to shareholders was $615 million, compared to loss of $290 million last year. Earnings per share were $0.52, compared to prior year's loss of $0.24.
Adjusted earnings per share were $0.61, compared to $0.75 last year. Analysts expected earnings of $0.58 per share for the quarter.
Net sales decreased 2.3 percent to $6.24 billion from $6.38 billion a year ago. The Street was looking for sales of $6.26 billion.
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