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Kraft Heinz 8-K Report, Financial Results (Feb 12, 2025)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 12, 2025
Period End
February 12, 2025
Security
KHC
In the record · 2016–202610-K1110-Q348-K161

KHC filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 161 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Feb ’19Feb ’19
  2. Material agreement8-K · Oct ’20Oct ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Leadership change8-K · Nov ’26Nov ’26

01—Abstract

Summary

Summary of the 8-K filed February 12, 2025. Cited figures are marked; the original filing is the authoritative source.

The Kraft Heinz Company reported fourth quarter and full year 2024 results on February 12, 2025, furnishing its press release as Exhibit 99.1.

For full year 2024, net sales decreased 3.0% to $25.8 billiona, and Organic Net Sales decreased 2.1%. Operating income fell 63.2% to $1.7 billion, driven by non-cash impairment losses of $3.7 billion, while Adjusted Operating Income rose 1.2% to $5.4 billion. Diluted EPS was $2.26, down 2.2%, and Adjusted EPS was $3.06, up 2.7%.

Net cash provided by operating activities was $4.2 billionb, and Free Cash Flow was $3.2 billion, up 6.6%. The company returned $2.7 billion to stockholders through $1.9 billion in dividends and $988 million in share repurchases. For the fourth quarter, net sales decreased 4.1% to $6.6 billion and Organic Net Sales decreased 3.1%, with volume/mix declining 4.1 percentage points.

Operating income was $(40) million, reflecting non-cash impairment losses of $1.4 billionc, largely tied to an intangible asset impairment on the Oscar Mayer brand. Diluted EPS of $1.76 was boosted by recognition of a $3.0 billion non-U.S. deferred tax asset and a related $0.6 billion valuation allowance tied to a transfer of business operations to a Netherlands subsidiary.

For fiscal 2025, the company guided to Organic Net Sales flat to down 2.5%, Constant Currency Adjusted Operating Income down 1% to down 4%, and Adjusted EPS of $2.63 to $2.74d. It expects an effective tax rate on Adjusted EPS of approximately 26% and Free Cash Flow flat versus the prior year.

02—Key points

Key Highlights

  1. Full year 2024 net sales were $25.8 billion, down 3.0%, with Organic Net Sales down 2.1% and volume/mix down 3.5 percentage points.
  2. Operating income fell 63.2% to $1.7 billion due to $3.7 billion of impairment losses, while Adjusted Operating Income rose 1.2% to $5.4 billion.
  3. Full year Adjusted EPS was $3.06, up 2.7%, while GAAP diluted EPS was $2.26, down 2.2%.
  4. Q4 2024 diluted EPS of $1.76 reflected a $3.0 billion non-U.S. deferred tax asset recognition and a $0.6 billion associated valuation allowance tied to a Netherlands subsidiary transfer.
  5. Free Cash Flow was $3.2 billion, up 6.6%, and the company returned $2.7 billion to stockholders in 2024.
  6. Fiscal 2025 guidance calls for Adjusted EPS of $2.63 to $2.74 and Organic Net Sales flat to down 2.5%.
  7. Net Leverage was 2.9 times Adjusted EBITDA of $6.4 billion (Adjusted EBITDA stated as $6,363 million).

03—Questions

Frequently Asked Questions

  1. Why did operating income decline so sharply in 2024?

    Operating income fell 63.2% to $1.7 billion, primarily because non-cash impairment losses were $3.0 billion higher than in the prior year, totaling $3.7 billion for the full year. Excluding these impairments, Adjusted Operating Income increased 1.2% to $5.4 billion.

  2. What drove the large Q4 2024 tax benefit?

    The company recognized a $3.0 billion non-U.S. deferred tax asset and an associated $0.6 billion valuation allowance related to the transfer of certain business operations to a wholly-owned subsidiary in the Netherlands. This produced a Q4 provision benefit of $(2,370) million.

  3. What is the company's outlook for 2025?

    For fiscal 2025, Kraft Heinz expects Organic Net Sales flat to down 2.5%, Constant Currency Adjusted Operating Income down 1% to down 4%, Adjusted EPS of $2.63 to $2.74, an effective tax rate on Adjusted EPS of approximately 26%, and Free Cash Flow flat versus the prior year.

  4. What drove the decline in net sales?

    For full year 2024, volume/mix declined 3.5 percentage points, primarily due to continued shifts in consumer behavior amid economic uncertainty and a decline in Lunchables. Price increased 1.4 percentage points, largely from pricing taken in certain categories to offset higher input costs.

  5. How much did Kraft Heinz return to shareholders in 2024?

    The company paid $1.9 billion in cash dividends and repurchased $988 million of common stock in 2024. About $1.9 billion remained under its publicly announced share repurchase authorization as of December 29, 2024.

04—Continue

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