Kraft Heinz Reports 6.4% Decline in Net Sales for Q1 2025

The Kraft Heinz Company reported a decline in financial performance for the first quarter of 2025, with net sales totaling $5.999 billion, down 6.4% from $6.411 billion in the same period last year. The decrease was attributed to unfavorable volume/mix and foreign currency impacts, which outweighed higher pricing. Operating income also fell by 8.1% to $1.196 billion, compared to $1.302 billion in the prior year. Net income attributable to common shareholders decreased by 11.1% to $712 million, resulting in diluted earnings per share of $0.59, down from $0.66.

In terms of operational changes, Kraft Heinz experienced a significant restructuring initiative, eliminating approximately 370 positions in the first quarter, with plans to eliminate an additional 370 positions throughout the year. This restructuring is part of a broader strategy to streamline operations and reduce costs. The company also completed two divestitures in 2024, selling its infant nutrition business in Russia and its Papua New Guinea subsidiary, which contributed to the overall decline in sales figures.

Geographically, the North America segment reported net sales of $4.488 billion, a decrease of 7.0% from the previous year, while the International Developed Markets segment saw a 4.4% decline to $817 million. In contrast, the Emerging Markets segment reported a smaller decline of 4.7%, with net sales of $694 million, driven by a 3.9% increase in organic sales, primarily due to higher pricing. The company’s total employee headcount was reduced as part of the restructuring efforts, reflecting a shift in operational strategy.

Kraft Heinz's cash flow from operating activities was $720 million for the quarter, down from $771 million in the prior year, primarily due to increased inventory costs and lower adjusted operating income. The company reported net cash used for investing activities of $878 million, significantly higher than the $287 million in the same period last year, largely due to purchases of marketable securities. Financing activities generated $900 million, driven by proceeds from debt issuance, including the issuance of senior notes.

Looking ahead, Kraft Heinz anticipates continued challenges from inflationary pressures and supply chain disruptions, particularly in its North America segment. The company is closely monitoring the impact of changing trade policies and tariffs, which could affect costs and pricing strategies. Despite these challenges, Kraft Heinz remains focused on its restructuring initiatives and operational efficiencies to drive future growth and profitability.