MW Kraft Heinz doesn't want to pass tariff costs on to consumers, but it may have to

By James Rogers

Kraft Heinz is closely monitoring the potential impacts of tariffs and inflation, CEO says

Kraft Heinz Co., known for its ketchup and Capri-Sun brands, lowered its full-year outlook Tuesday amid what it described as a "volatile" operating environment.

The processed-food giant $(KHC)$ said it is working to limit the impact of tariffs on customers but acknowledged that price changes could happen.

"In regards to pricing, the tariffs, we are trying to do everything we possibly can to minimize the amount of price necessary," Chief Financial Officer Andre Maciel said during a conference call to discuss the results. The company, he added, has anticipated some purchases and is looking at alternative sourcing.

"There are opportunities on the mix side," Maciel said. "There are certain [stock-keeping units] within a category that are less impacted than others, when it comes to tariffs. So, all of that is at play."

"But pricing might be necessary," he added, describing this as "a work in progress."

Kraft Heinz's first-quarter sales fell 6.4% to $5.999 billion, just below the FactSet consensus estimate of $6.017 billion. That marked the eighth straight quarter that topline results missed expectations.

Prices increased 0.9 percentage points compared with the prior year, with increases in the North America and emerging-markets segments partially offset by lower prices in international developed markets. There was higher pricing in certain categories to mitigate higher input costs, primarily in coffee, the company said.

The results come as U.S. companies across a range of sectors are wrestling with the potential fallout from President Donald Trump's sweeping tariffs. Also on Tuesday, car giant General Motors Co. $(GM)$ reported first-quarter results and said that it is updating its full-year guidance. GM also took the surprise move of rescheduling its conference call to discuss the results and its guidance.

Kraft Heinz is closely monitoring the potential impacts from macroeconomic pressures such as tariffs and inflation, CEO Carlos Abrams-Rivera said in the company's statement. "As the operating environment remains volatile, we are lowering our full-year outlook and expanding the range of our expectations to better reflect potential outcomes," he said.

For fiscal 2025, Kraft Heinz now expects organic net sales to be down 1.5% to 3.5% compared with the prior year, compared with its previous outlook of flat to down 2.5%.

Adjusted earnings are now expected to be between $2.51 and $2.67 a share, compared with the previous range of $2.63 to $2.74 a share.

Kraft Heinz's stock gained 0.5% in afternoon trading, which put it on track to snap a four-day losing streak.

"In today's uncertain times, we are committed to controlling the controllables and making the necessary investments to deliver quality, taste, and value to our consumers through our beloved brands," Abrams-Rivera said in the statement. "This quarter, we delivered results in line with our top line expectations despite growing market pressures."

The company's first-quarter net income was $712 million, or 59 cents a share, down from $801 million, or 66 cents a share, in the prior year's quarter.

However, adjusted profit of 62 cents a share was above the FactSet consensus estimate of 60 cents a share.

Kraft Heinz shares are down 5.7% in 2025, compared with the S&P 500 index's SPX decline of 5.6%.

-James Rogers

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April 29, 2025 14:37 ET (18:37 GMT)

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