By Neil J Kanatt (Reuters) -Kraft Heinz lowered its annual sales and profit forecasts on Wednesday, signaling that budget-conscious consumers continue to push back against pricier snacks and pantry condiments. The results, which sent shares down about 3%, come as the packaged goods maker presses ahead with plans to separate into two companies, with one […]
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Kraft Heinz trims annual sales, profit forecasts as demand remains stressed
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By Neil J Kanatt
(Reuters) -Kraft Heinz lowered its annual sales and profit forecasts on Wednesday, signaling that budget-conscious consumers continue to push back against pricier snacks and pantry condiments.
The results, which sent shares down about 3%, come as the packaged goods maker presses ahead with plans to separate into two companies, with one focused on groceries and the other on sauces and spreads.
The spinoff, expected to be completed by the second half of 2026, aims to reduce operational complexity and improve focus on each business.
Consumers, faced with high inflation and economic uncertainty, are increasingly switching to cheaper store brands, weighing on demand for packaged goods.
Mondelez on Tuesday tempered its full-year outlook, while Skippy peanut butter maker Hormel lowered its current-quarter profit forecast on Wednesday.
“The operating environment remains challenging,” Kraft CEO Carlos Abrams-Rivera said. “We see these pressures as persisting beyond the fourth quarter, leading to a longer path to consumer recovery.”
The Lunchables maker expects 2025 organic net sales to fall 3% to 3.5%, compared with its prior target of a 1.5% to 3.5% decline, in part due to weakness in markets such as Indonesia and tepid demand from U.S. retailers.
“Kraft Heinz’s downbeat performance and outlook reflect weakening demand for name-brand consumer packaged goods as financial pressures push shoppers to cheaper labels or to reduce spending altogether,” eMarketer analyst Rachel Wolff said.
“Consumers’ growing aversion toward ultra-processed foods and artificial dyes is curbing sales for Kraft’s marquee brands.”
The company forecast annual adjusted earnings per share of between $2.50 and $2.57, compared with its prior expectation of $2.51 to $2.67.
Third-quarter net sales fell 2.3% to $6.24 billion, compared with analysts’ estimate of $6.26 billion, according to data compiled by LSEG.
It reported adjusted quarterly earnings per share of 61 cents, compared to estimates of 58 cents.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Sriraj Kalluvila)