Kraft Heinz pauses plans to split into 2 companies as it faces consumer headwinds, pricing challenges

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Kraft Heinz (KHC) announced on Tuesday that it would pause plans to break the company into two separate entities, with new CEO Steve Cahillane saying that its “challenges are fixable and within our control.”

Kraft Heinz, which was set to spin off its meal business and grocery businesses into new companies called Global Taste Elevation and North American Grocery, respectively, now plans to invest $600 million across marketing, sales, research and development, and pricing.

“We are confident in the opportunity ahead and believe this investment will accelerate our return to profitable growth,” said Cahillane, who became CEO on Jan. 1.

Cahillane previously led Kellanova, which successfully split from the Kellogg Company in 2023 and was sold to Mars.

Stifel analyst Matthew Smith said the pause was, in a word, a “negative” for the company.

After falling as much as 6% in premarket trade following the news, Kraft Heinz stock was up about 1% in morning trading on Wednesday.

In its fourth quarter results, the company reported adjusted earnings of $0.67, a beat compared to the expected $0.61, per Bloomberg consensus data. Revenue came in slightly lower at $6.35 billion compared with the $6.37 billion expected.

On a call with investors, Cahillane said recent SNAP changes have been a headwind for consumers.

“We’ve got a lot of plans in place, and we’ll continue to develop plans to meet that consumer where they are with the right price points, the right entry price points, the right pack sizes,” he said.

Prices increased 0.5% in the latest quarter.

For 2026, the company expects organic net sales to be down 1.5% to 3.5% more than the 0.6% drop in annual revenue Wall Street had expected. Its profit forecasts were also short of estimates, with Kraft Heinz projecting adjusted earnings per share to fall between $1.98 and $2.10, below the $2.50 analysts expected.