Kraft Heinz Q1 Net Sales $6.05B, Adjusted EPS Beats by $0.08, Free Cash Flow Up 58.9%
KHC•Kraft Heinz reported first-quarter net sales of $6.05 billion, surpassing forecasts by over $160 million, with adjusted EPS of $0.58 beating estimates by $0.08. Free cash flow climbed 58.9% to $0.8 billion and gross profit margin expanded 230 basis points to 36.7%.
1. Q1 Financial Highlights
Kraft Heinz posted first-quarter net sales of $6.05 billion, topping expectations of around $5.89 billion, while diluted EPS rose 13.6% to $0.67. Adjusted EPS of $0.58 surpassed analyst forecasts by $0.08, though organic net sales fell 0.4% due to a 1.2-point volume decline offset by a 0.8-point price increase.
2. Profitability and Cash Flow
Gross profit margin expanded 230 basis points to 36.7%, although adjusted gross profit margin narrowed 30 basis points to 34.1% as inflationary costs and higher advertising spend weighed on profitability. Free cash flow surged 58.9% to $0.8 billion, supporting a $474 million dividend payout and no share repurchases.
3. Brand Investments and Market Share
Investments in 2025 are driving early brand momentum, with 35% of the portfolio gaining or holding market share compared with 21% a year earlier. Emerging Markets net sales rose 7.6% to $746 million, while North America sales dipped 0.7% to $4.46 billion, with strong traction in must-win categories like Taste Elevation.
4. Outlook and Strategic Decisions
The company reaffirmed its full-year outlook, expecting organic net sales to decline 1.5%–3.5% and adjusted EPS of $1.98–2.10, citing inflation and consumer sentiment as headwinds. A planned split was shelved to save $300 million, redirecting $600 million toward marketing, sales and R&D, with an estimated 100-basis-point SNAP benefit headwind factored in.
