Kraft Heinz (KHC) Q4 Earnings Miss Revenue Estimates, Beat EPS

Revenue:

* $6.58 billion vs. analyst estimates of $6.66 billion
* 4.1% YoY decline

Adjusted EPS:

* $0.84 vs. analyst estimates of $0.78
* 7.8% beat

Additional Highlights:

* Adjusted EBITDA: $220 million vs. analyst estimates of $1.65 billion
* Adjusted EPS guidance for FY2025: $2.69 at the midpoint, missing analyst estimates by 11.7%
* Organic revenue: -3.1% YoY
* Sales volumes: -4.1% YoY
* Operating margin: -0.6%
* Free cash flow margin: 17.4%

Company Overview:

Kraft Heinz is a packaged foods giant specializing in coffee, cheese, and packaged meat. The company emerged from a 2015 merger between Kraft and Heinz.

Industry Overview:

Packaged food stocks are considered resilient investments due to the consistent demand for food products. However, the industry faces challenges such as food safety and labeling regulations and competition from smaller specialized firms.

Volume Growth:

Kraft Heinz's sales volumes have declined by 2.8% over the past two years, indicating a struggle to move products.

Q4 Earnings Commentary:

Kraft Heinz CEO Carlos Abrams-Rivera stated that despite revenue challenges, the company maintained profitability and generated strong cash flow.

Analyst Sentiment:

Analysts project flat revenue for Kraft Heinz over the next 12 months. However, they also note that EPS guidance missed expectations and EBITDA fell short of estimates.

Investment Considerations:

While Kraft Heinz's Q4 earnings were mixed, investors should consider the company's long-term fundamentals and valuation when making investment decisions.