"The earnings beat came on adjusted EPS of $0.61, a $0.03 advantage over consensus. However, this outperformance sits atop softening fundamentals. Organic net sales fell 2.5% year over year, and the company guided for full-year organic decline of 3.0% to 3.5%. CEO Carlos Abrams-Rivera acknowledged the headwind directly: "Our third quarter results reflect a modest year-over-year improvement in our top-line performance relative to the first half of the year." Translation: the rate of decline slowed, but decline persists."
"Adjusted operating income fell 16.9% to $1.1B, signaling that cost pressures and competitive intensity are outpacing any pricing or volume gains. This is the metric that matters most for assessing operational health, and it's moving in the wrong direction. Gross profit margin contracted 230 basis points to 31.9%, a significant deterioration. Input costs, promotional activity, and unfavorable product mix all appear to be at work."
Kraft Heinz reported adjusted EPS of $0.61, beating estimates of $0.58 while revenue missed at $6.24 billion versus $6.26 billion expected. Organic net sales declined 2.5% year over year and the company guided full-year organic decline of 3.0% to 3.5%. Adjusted operating income fell 16.9% to $1.1 billion, and gross profit margin contracted 230 basis points to 31.9%. Management set adjusted operating income guidance for full-year 2025 down 10% to 12%. Operating cash flow rose 185% to $3.09 billion and free cash flow reached $2.49 billion, with projected FCF conversion of at least 100%. Shares were flat in early trading, and CEO Carlos Abrams-Rivera said the third quarter results reflect a modest year-over-year improvement in top-line performance relative to the first half.
Read at 24/7 Wall St.
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