Aug 5 (Reuters) – Kraft Heinz raised its annual forecasts after beating quarterly sales estimates on Wednesday, as CEO Steve Cahillane’s turnaround efforts gained traction and price hikes helped counter lower volumes in North America and other markets.
The better-than-expected results give credence to Cahillane’s turnaround strategy, which has driven an uptick in marketing and innovation spends as the company leans aggressively into protein-heavy foods and electrolyte-infused drinks to attract health-conscious consumers.
The packaged goods company said it would increase its incremental investments by $100 million to about $700 million in 2026, a cash injection Cahillane had hinted at during an interview with Reuters in June.
Cahillane, who became Kraft Heinz’s CEO in January, stressed that these investments were to build on the good momentum seen so far.
Kraft Heinz now expects annual organic sales to fall between 0.5% and 2.0%, compared with its prior view of a 1.5% to 3.5% decline.
It also expects annual adjusted earnings per share of $2.03 to $2.09, compared with its prior forecast of $1.98 to $2.10.
Barclays analysts said the results were encouraging, particularly since the company was “increasing its planned investment spend based on early returns, rather than the current investment levels not yielding the desired results.”
Kraft Heinz shares, however, were down about 4% in early trading.
NO ‘VICTORY LAP’ JUST YET FOR KRAFT HEINZ, SAYS CEO
While Kraft Heinz benefited from price-led growth during the quarter, its volumes remained under pressure in key markets including North America. “Growth in Canada and Away From Home was offset by declines in U.S. Retail, which were primarily driven by meats,” CFO Andre Maciel said in prepared remarks.
Market share in North America declined across both meats and meals, Maciel said.
Meanwhile, the company is making product and packaging investments across its Oscar Mayer brand and stepping up innovation for Kraft Mac & Cheese, to which it added the protein-heavy PowerMac line earlier this year for consumers looking to maintain muscle mass as they lose weight.
“The momentum is growing. Nobody’s doing a victory lap that we’re declining less than we anticipated. But it is moving in the right direction,” Cahillane said on a post-earnings call, adding that this is giving the company confidence to invest further to boost consumption and market share.
Kraft Heinz has been navigating a challenging environment as energy and raw material costs surge amid ongoing geopolitical conflicts.
Maciel said the company was well hedged on energy and edible oils for most of 2026, but was hedged on certain resins and metals only through the middle of the third quarter.
“As those roll off, we expect greater exposure to spot prices in the fourth quarter,” he said.
Kraft Heinz’s quarterly sales fell 1.4% to $6.26 billion from a year earlier, compared with analysts’ expectations of a 3.6% decline to $6.12 billion, according to data compiled by LSEG.
On an adjusted basis, the company reported a profit of 56 cents per share, down 18.8% from a year ago but beating analysts’ estimates of 53 cents per share.
A non-cash $7.4 billion impairment charge contributed to an operating loss during the quarter, though one smaller than the company reported a year earlier.
(Reporting by Anuja Bharat Mistry in Bengaluru and Alexander Marrow in London; Editing by Jonathan Ananda)
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