Food giant boosts forecasts after stronger-than-expected quarterly sales, backed by pricing actions, increased marketing investment and growth in health-focused products
Chicago: Kraft Heinz raised its full-year forecasts after reporting better-than-expected second-quarter sales and earnings, signalling early success for Chief Executive Officer Steve Cahillane’s turnaround strategy as the company invests heavily in innovation and higher-growth product categories.
The packaged food company said it now expects annual organic sales to decline by between 0.5% and 2.0%, an improvement from its previous forecast for a decline of 1.5% to 3.5%.
Kraft Heinz also tightened its guidance for adjusted earnings, forecasting annual adjusted earnings per share of $2.03 to $2.09, compared with its previous outlook of $1.98 to $2.10.
Turnaround strategy gains momentum
The stronger outlook comes as Cahillane, who became CEO in January, steps up efforts to revive growth through increased spending on marketing, innovation and emerging consumer trends.
The company said it would raise incremental investment spending by $100 million, bringing total additional investments in 2026 to around $700 million.
Kraft Heinz is focusing on categories such as protein-rich foods and electrolyte-infused beverages to attract increasingly health-conscious consumers.
The improved results provide further support for Cahillane’s strategy of strengthening brands, expanding product innovation and driving growth beyond traditional packaged foods.
Sales exceed expectations
Quarterly net sales declined 1.4% year-on-year to $6.26 billion, outperforming analyst expectations for a 3.6% decline to $6.12 billion, according to LSEG data.
Adjusted earnings came in at 56 cents per share, down 18.8% from a year earlier but ahead of analysts’ consensus estimate of 53 cents per share.
Price increases helped support revenue, although the company continued to face weaker sales volumes in some of its largest markets.
North American volumes remain under pressure
Chief Financial Officer Andre Maciel said volume challenges persisted, particularly in the company’s US retail operations.
“Growth in Canada and Away From Home was offset by declines in U.S. Retail, which were primarily driven by meats,” Maciel said.
Despite the sales beat, Kraft Heinz shares were little changed in premarket trading.
The company also recorded a non-cash impairment charge of $7.4 billion, which contributed to an operating loss during the quarter. However, the loss was smaller than the one recorded during the same period last year.
Cost pressures remain a concern
Kraft Heinz continues to navigate rising input and operating costs linked to ongoing geopolitical tensions and supply-chain volatility.
Maciel said the company remains largely protected from higher commodity costs through hedging arrangements covering energy and edible oils for most of 2026.
However, he cautioned that protection against rising prices for certain resins and metals only extends through the middle of the third quarter.
“As those roll off, we expect greater exposure to spot prices in the fourth quarter,” he said.
The company will continue balancing pricing actions, cost management and investment spending as it seeks to sustain momentum through the remainder of the year.
Source: Emirates 24|7