Kraft Heinz announced on Wednesday that its second-quarter performance exceeded expectations, as American consumers are currently striving to save on household budgets, leading to a resurgence in demand for staple foods and condiments.
Due to ongoing inflation and increased economic uncertainty, consumers are choosing to cook more affordable meals at home rather than dine out. People prioritize protein intake in their diets, which has also boosted demand for Kraft Heinz steak sauce and Worcestershire sauce.
Following earlier reports this month speculating Kraft Heinz’s exploration of splitting its grocery business, company executives stated during a financial conference call that the board is “urgently” evaluating strategic options for some brands.
Kraft Heinz recorded a $9.3 billion impairment charge in the second quarter as its market value continued to decline to $33.8 billion, with the stock value dropping approximately 30% since 2022.
The company reiterated its annual targets, expecting the tariffs imposed by President Trump to impact costs by around 100 basis points this year.
The company’s stock price rose 1% in early trading.
Kraft Heinz has begun focusing on introducing healthier options in categories like desserts to meet consumer demand, stating plans to remove food dyes from its product lineup. The company also announced intentions to change the packaging of Kraft Mayonnaise to emphasize its dye and artificial flavor-free nature; weeks prior, snack giant PepsiCo revealed plans to repackage its Lay’s potato chips and Tostitos corn chips without these substances.
While Kraft Heinz’s quarterly sales declined by about 2.7 percentage points due to softness in categories like coffee, deli meats, and ready-to-eat meals, the decline was less than the previous quarter’s 5.6 percentage points.
In the largest North American market, sales volume decreased by 3.4 percentage points.
Kraft Heinz CEO Carlos Abrams-Rivera stated in a release, “Looking ahead, we continue to anticipate growth in our international business, but we do not foresee improvements in the American industry for the remainder of 2025.”
CFRA Research analyst Arun Sundaram suggested that due to consumer pursuit of value, Kraft Heinz has consistently invested in promotional activities, combined with the impact of inflation, potentially putting pressure on profit margins for this quarter.
According to data compiled by the London Stock Exchange Group (LSEG) up to June 28, the company’s three-month net sales amounted to $6.35 billion, exceeding analysts’ average estimate of $6.26 billion.
Adjusted earnings per share were $0.69, also exceeding expectations.
(Adapted from a report by Reuters)