Kraft Heinz outlook falls short, warns of rising tariff risk

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Kraft Heinz Co. said it will discount key items in the coming year while improving products and boosting marketing in order to compete for inflation-weary customers.

The food company forecast full-year adjusted earnings per share and organic sales below analyst estimates. Also rattling investors, it issued a blanket warning that its outlook doesn’t account for the “significant worsening” of tariffs, food regulation changes, changes to SNAP benefits, currency impacts, and an overall declining macro environment.

The shares fell 4.1% at 10:13 a.m. in New York. The stock had declined 19% in the last twelve months through Tuesday’s close, versus a 21% gain for the S&P 500 Index.

The company noted pressure on some major brands, including Lunchables, Kraft Mayonnaise, Kraft Mac & Cheese and Capri Sun, and said it will assess opportunities to drive more sales.

In a call with analysts on Wednesday morning, executives laid out plans to increase volume. The company also expects benefits from efficiency measures, but will raise prices where commodities face higher costs, such as coffee, and in emerging markets.

Promotions are simply not as effective as they once were, Chief Financial Officer Andre Maciel said, so the company may do more broad-based price cuts. “There are places where we are contemplating as well base price changes instead of simply a promotion.”

The company, however, is seeing growth in discount retailers like Dollar General and club channels as consumers make more frequent trips to the supermarket in an attempt to spend less.

“The outlook for 2025 was weak,” wrote Arun Sundaram, an analyst at CFRA. He maintained a buy rating on the stock. “Yet, we think KHC will see better days ahead, potentially by Q2 2025.”

—With assistance from Janet Freund.