Kraft Heinz Pauses Breakup, Pledges $600 Million Turnaround
Kraft Heinz pauses its planned split and will invest $600 million in marketing, sales and research and development, the company said.
Overview
The Kraft Heinz Co. said it is pausing its planned split into two companies and will instead invest $600 million in marketing, sales and research and development, according to its fourth-quarter earnings release.
The move follows a decline in sales and profits, with Kraft Heinz reporting net sales fell 3% to $6.35 billion in the October-December quarter and net income down 69.5% to $651 million, the company said.
Steve Cahillane, who became CEO on Jan. 1, said in a statement that the company's challenges are "fixable and within our control," while Bernstein analyst Alexia Howard called the $600 million a potential "reboot" and TD Cowen's Robert Moskow said investors were concerned, according to their statements and research notes.
Kraft Heinz announced the split plan in September to separate faster-growing condiments such as Heinz and Philadelphia from slower-selling grocery brands, and regulatory filings show Berkshire Hathaway took a $3.76 billion write-down and may sell its roughly 325 million shares.
Cahillane said the company will spend the $600 million across 2026 on product improvements, marketing and select pricing initiatives and that the board will revisit a spinoff once Kraft Heinz returns to profitable growth, the company said.
Analysis
Center-leaning sources frame Kraft Heinz's pause as a sign of underlying weakness by juxtaposing the CEO's optimistic statement with stark financial metrics (net income down 69.5%, falling revenue since 2020), analyst worries and Buffett's criticism. Emphasis on declines, investor concern and the pivot to $600 million investment creates a cautiously skeptical narrative.
Sources (4)
FAQ
Steve Cahillane became CEO on January 1, 2026. He previously led Kellogg's through its 2023 breakup into separate cereal and snack companies.
Net sales fell 3% to $6.35 billion in Q4, with net income down 69.5% to $651 million. Full-year net sales declined 3.5% to $24.9 billion, organic sales down 3.4%, and volume down 4.1%.
Announced in September 2025, the plan was to separate faster-growing condiments like Heinz and Philadelphia from slower-selling grocery brands into two companies.
The $600 million will be spent across 2026 on marketing, sales, research and development, product improvements, and select pricing initiatives to drive recovery and profitable growth.
Organic net sales expected to decline 1.5% to 3.5% from FY2025 levels of $24.94 billion, with adjusted EPS projected at $1.98 to $2.10, below 2025's $2.60.
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