Latest news with #KraftHeinzCo
Bloomberg
2 days ago
- Business
- Bloomberg
Kraft Heinz's Sales Top Estimates as It Reiterates Outlook
Kraft Heinz Co. reported sales that topped estimates, pointing to progress in winning over inflation-weary shoppers. Organic revenue in the second quarter declined 2%, the owner of Heinz, Kraft and Oscar Mayer brands said in a statement. Analysts had expected a drop of 2.8%. Profit also beat estimates.
Yahoo
15-07-2025
- Business
- Yahoo
Kraft Heinz Bondholders Position for Company's Potential Split
(Bloomberg) -- Kraft Heinz Co.'s bond investors are positioning for what the company will do next as it considers spinning off its slower-growing brands, looking for probable losers and winners. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Plunge in 2025, Officials Say The company is weighing a split that could separate off a large part of its grocery segment and leave behind its faster-growing sauces units, Bloomberg reported on Friday, plans that are still being finalized but that could be announced in the coming weeks. Some of the company's bonds have weakened relative to Treasuries since then, with the news raising questions about whether the debt could end up at a lower-margin business. The spread on Kraft Heinz's 3.875% notes due 2027, for example, widened five basis points since Friday to 68 basis points, according to Trace. Spreads on high-grade bonds were on average unchanged on Friday and Monday, Bloomberg index data showed. At the same time, money managers expect some of the company's bonds to rally, if Kraft Heinz looks to buy back securities to cut its debt load before splitting up. Securities with prices below face value may be good candidates for being bought back, as a way to cheaply cut liabilities. The firm's 4.875% bonds due 2049, which trade at about 83 cents on the dollar, have seen their spreads narrow 2 basis points to 127 basis points over the last three sessions, according to Trace. Companies often buy back debt at some premium to market value, so investors that buy now may still be able to profit. A spokesperson for Kraft Heinz said the company does not comment on speculation. 'As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value,' the representative said in a statement to Bloomberg on Monday, repeating a statement the company had provided on Friday. Where To? Much of the packaged food maker's debt is vulnerable to more widening after it reports financial results later this month. A weak print could exacerbate 'fears of being stuck in a grocery-only business' for bondholders, wrote James Dunn, head of consumer goods and leisure coverage at research firm CreditSights. If Kraft Heinz splits, its bonds would likely have to remain with only one of the companies, whichever one ends up representing most of its business, according to a note from JPMorgan analyst Carla Casella. She believes the split companies would each work to keep investment-grade ratings. That would likely require paying down debt, possibly through a tender offer, according to Julie Hung, a Bloomberg Intelligence analyst who researches Kraft Heinz. 'The question is, when you spin off such a big part of your business, where do the bonds go?' she said. Kraft Heinz had more than $21 billion of long-term debt, including longer-term securities maturing within a year, as of the end of March. Navigating the Unknown Even as bondholders position for any possible splitting, there are many unknowns. If there is a transaction, it's not clear what the capital structures of the separated companies would look like, when a deal would close, how the rating agencies would react, and whether each of the new entities would prioritize staying investment grade. Among Kraft Heinz's strongest brands are its legacy condiment businesses, along with Kraft macaroni and cheese, and Philadelphia cream cheese. Its Oscar Mayer packaged meats and Velveeta cheese lines are at the bottom, with desserts like Jell-O lying somewhere in the middle. The company in April lowered its sales outlook for the year and reported a sixth straight quarter of revenue declines, citing tariff threats and weakening consumer sentiment at the time. It has been battling inflation and the arrival of weight-loss drugs, too, which have spurred a shift away from processed foods. Kraft Heinz is rated BBB, the second-lowest investment-grade level, by Fitch Ratings and S&P Global Ratings. Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot The New Third Rail in Silicon Valley: Investing in Chinese AI How Hims Became the King of Knockoff Weight-Loss Drugs 'The Turbulence Is Brutal': Four Shark Tank Businesses on Tariffs Will Trade War Make South India the Next Manufacturing Hub? ©2025 Bloomberg L.P.
Bloomberg
15-07-2025
- Business
- Bloomberg
Kraft Heinz Bondholders Position for Company's Potential Split
Kraft Heinz Co. 's bond investors are positioning for what the company will do next as it considers spinning off its slower-growing brands, looking for probable losers and winners. The company is weighing a split that could separate off a large part of its grocery segment and leave behind its faster-growing sauces units, Bloomberg reported on Friday, plans that are still being finalized but that could be announced in the coming weeks.
Bloomberg
14-07-2025
- Business
- Bloomberg
Kraft Heinz Breakup Primed to Split Its Ketchup From Hot Dogs
The Heinz ketchup and Oscar Mayer hot dogs featured at barbecues this summer are owned by the same company. Next summer, that might not be the case. Kraft Heinz Co. is preparing to break itself up and spin off a large part of its business into a new entity, people familiar with the matter said Friday. The packaged foods company had said in May it was considering 'potential strategic transactions,' but hasn't said which brands it might separate.
The Star
14-07-2025
- Business
- The Star
Kraft Heinz planning grocery business spin-off
New York: Kraft Heinz Co is looking to spin off a large chunk of its grocery business, including many Kraft products, into a new entity that could be valued at as much as US$20bil on its own, the Wall Street Journal reports. This would leave the company with products such as its namesake Heinz ketchup and Dijon mustard brand Grey Poupon, the report said, citing people familiar with the matter. News of the potential move was the second effort last week by a storied US company looking to shore up shareholder value as shoppers ditch their pricey products in an uncertain economy. Earlier last week, cereal maker WK Kellogg agreed to a US$3.1bil buyout deal from Italy's Ferrero. 'As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value,' a company spokesperson said. The company's shares closed up 2.5%. It currently has a market value of US$31.33bil. Kraft Heinz was formed in 2015 after Warren Buffett's Berkshire Hathaway and Brazilian private equity firm 3G Capital combined the former Kraft Foods with H.J. Heinz, which they bought in 2013. But it has been a challenging investment for Berkshire. Inflationary pressures and a shift in focus toward fresher, less processed food have hurt demand for the company's lunch combos and other products. It lowered annual forecasts and reported a dour quarter in April, hurt by muted consumer spending. Kraft Heinz also said last month it would stop the launch of new products with artificial colours in the United States after Health Secretary Robert F. Kennedy Jr outlined plans to remove synthetic food dyes from the US food supply to address chronic diseases and conditions. According to the Wall Street Journal report last Friday, a split could be finalised in the coming weeks, but Kraft Heinz has discussed other scenarios with its advisers and its board has not signed off on a final decision. The company is also working on which brands would be part of the spun-off entity, the report said. 'Kraft Heinz spinning off its grocery business echoes the 2023 Kellogg spin-off in which the company spun off its cereal business, which had been in volumetric decline for some time,' said Connor Rattigan, analyst at Consumer Edge. 'As consumer packaged goods makers (CPGs) contend with both changing consumer preferences and a challenging consumer environment, other CPGs may look to mergers and acquisitions and or similar corporate actions to improve their category exposures and improve their top-line trajectory,' Rattigan said. — Reuters
