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Q4: 2026-02-11 Earnings Summary

EPS of $0.14 beats by $0.00

 | Revenue of $128.82M (18.13% Y/Y) beats by $2.75M

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Kraft Heinz is pumping the brakes on plans to break up the company, with its new CEO saying the food giant’s challenges are “fixable and within our control” as it shifts focus toward reigniting profitable growth through a $600 million investment push.

In a note in the company’s routine fourth quarter report, CEO Steve Cahillane said that instead of splitting up, the company will double down on rebuilding growth — backing that up with a massive investment in the brand’s marketing, sales and research and development.

“When I decided to join Kraft Heinz, I knew that this was an exciting opportunity to contemporize iconic brands, better serve consumers and customers, and build meaningful shareholder value,” Cahillane said in the press release.

“Since joining the company, I have seen that the opportunity is larger than expected and that many of our challenges are fixable and within our control,” he continued. “My number one priority is returning the business to profitable growth, which will require ensuring all resources are fully focused on the execution of our operating plan.”

MCDONALD’S PLANS MASSIVE OVERHAUL WITH MAJOR CHANGES TO RESTAURANTS AND MENUS

“As a result, we believe it is prudent to pause work related to the separation and we will no longer incur related dis-synergies this year.”

Kraft Heinz announced in September that its board of directors approved a plan to split it into two independent, publicly traded companies through a tax-free spinoff. The aim was to create two more focused organizations with less complexity that would be able to maximize their brands and boost profitability.

Cahillane was slated to lead the business it is calling Global Taste Elevation, overseeing brands like Heinz, Philadelphia and Kraft Mac & Cheese. The other company, called North American Grocery, would oversee its portfolio of grocery staples like Oscar Mayer, Kraft Singles and Lunchables.

As of December, the official names of the new companies were not yet determined, and the company also had not announced who would lead its North American grocery business.

In the fourth-quarter report, Kraft Heinz also announced its commitment of $600 million to marketing, sales, research and development, product improvements and select pricing initiatives across 2026. Cahillane said Kraft’s strong balance sheet and $3.7 billion in free cash flow gives it the financial flexibility to fund this push while still generating excess cash.

“We are confident in the opportunity ahead and believe this investment will accelerate our return to profitable growth,” he said.

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While leadership is optimistic, Kraft’s 2025 numbers showed clear strain — full-year net sales were down 3.5% to $24.9 billion, organic sales were down 3.4%, volume was down 4.1%, and adjusted operating income was down 11.5%.

Kraft’s biggest pressure points were in coffee, cold cuts, frozen meals, bacon and select condiments, as inflation in commodity and manufacturing costs outpaced efficiency efforts. The company reported an operating loss of $4.7 billion last year, largely driven by “non-cash impairment charges.”

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FOX Business’ Daniella Genovese contributed to this report.

Paramount has enhanced its

hostile offer to acquire all of Warner Bros. Discovery

WBD

0.68%

increase; green up pointing triangle, including agreeing to pay the $2.8 billion termination fee Warner would owe its chosen suitor, Netflix

NFLX -3.15%

decrease; red down pointing triangle, should that deal collapse.

In a regulatory filing, Paramount also said it was adding a “ticking fee” of 25 cents per share, which it would pay to Warner shareholders for each quarter its deal hasn’t closed, starting in January 2027.

Indian IT stocks have felt pressure recently as global developments in artificial intelligence spark fresh concerns among investors. News of China ramping up its AI innovation, coupled with new product launches from international AI platforms, has triggered a wave of sentiment-driven selling in the sector.

Speaking to ET Now, Sushovan Nayak from Anand Rathi highlighted the broader context behind this market reaction. “So, basically as you would be aware, Anthropic coming up with its [product] after that there was this Altruist, which was a [platform] which basically also got released and then the China bit which you are mentioning. So these will have a sentimental negative impact on Indian IT,” he said.

Nayak added that while these developments could create short-term pain, the long-term fundamentals of Indian IT remain strong. “The question is, if you look at, let us say, an OpenAI or an Anthropic, both of them are planning to go public. So, they will come up with these plug-ins almost at regular intervals. Each time they come up with that it will be another death knell on Indian IT, but I believe that this is going to be much more resilient. But there will be some short-term pain, which obviously we are going through, so that is what my limited submission is.”

He emphasized the continuing importance of implementation and customization of software, where Indian IT firms maintain a competitive edge. “At the end of the day, you need to implement and customise those softwares. So that is where Indian IT comes through. And with those hyperscalers putting in the amount of capex—like earlier in 2025 it was almost $400 billion for the top four, now coming to $600 billion—at the end of the day you need to have cloud transformation, data governance, data cleaning, and all of that stuff, where you end up becoming implementation partners for either a Databricks or a Snowflakes, who will [require] significant amount of work,” he noted.

When asked about valuations, Nayak said he is cautiously optimistic. “I would want to see how these folks go about, like both OpenAI and Anthropic, because if they keep on releasing such disruptive models every alternate day, then we become sentimentally negative. Obviously, I would gradually increase my buying in these, but I would possibly start looking at them for sure. I mean, Infosys has obviously been top pickers and will continue to be—it is such that these are disruptive times, so yes, that is a way I will look at it.”

Regarding opportunities in the market, Nayak expressed confidence in large-cap IT stocks. “As I had also mentioned earlier, we basically are still positive on large-cap IT, and I completely understand that there is legacy IT work that is also there which will potentially get disrupted. But the ones within the large-caps which are most adaptable or are leveraging on their gen AI tools to a larger extent, someone like an Infosys, someone like an LTIM or an HCL Tech, these are the ones which we like,” he said.
He further highlighted HCL Tech’s ER&D exposure as a source of resilience. “HCL Tech, because of the ER&D exposure, because 75% of their business is services and the other 25%—that is 15% ER&D, 10% would be around HCL Software—I think that would be a little more resilient in all of this. But as I said, this is more of sentimental things rather than creating a very structural decline in all of them, that is what at least my view is, but stand corrected on this.”Despite the current nervousness, experts suggest that Indian IT’s structural strengths and ability to partner in global AI and cloud initiatives should help the sector navigate these uncertain times.

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