AI Takeaway
KHC reported a deeply negative FY2025, swinging to a net loss of $5.85B and operating loss of $4.67B, driven by a massive $5.69B surge in SG&A expenses that overwhelmed a modest cost-of-revenue improvement.
Cost of Revenue
$16.63B
-1.45% YoY
EPS (Basic)
$-4.93
-317.18% YoY
Operating Income
$-4.67B
-377.42% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue (Cost of Revenue + Gross Profit) was approximately $24.94B, down from ~$25.85B in the prior year. Gross profit fell 7.3% YoY to $8.31B, reflecting pricing and volume pressures across KHC's brand portfolio.
Source: Source: 10-K Income Statement
SG&A expenses surged 78.1% YoY to $12.98B from $7.29B, which is the primary driver of the $4.67B operating loss compared to a $1.68B operating income in the prior year. This likely reflects significant goodwill/intangible asset impairment charges embedded in SG&A.
Source: Source: 10-K Income Statement
KHC swung from a net income of $2.74B to a net loss of $5.85B, a deterioration of over $8.5B. Basic EPS collapsed from $2.27 to -$4.93, reflecting the magnitude of non-cash charges and operational headwinds.
Source: Source: 10-K Income Statement
2 more insights available
Upgrade to unlockThe dramatic increase in SG&A to $12.98B strongly suggests large goodwill or brand impairment charges were recorded in FY2025. KHC has historically carried significant goodwill from the 2015 Kraft-Heinz merger, and continued brand value erosion could trigger further write-downs in future periods. This is a recurring risk given the company's heavy reliance on legacy consumer brands.
Source: Source: 10-K Income Statement & Balance Sheet
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $0.67 versus the $0.62 analyst consensus — a +8.6% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Cost of Revenue | $16.63B | $16.88B | -1.45% |
Gross Profit | $8.31B | $8.97B | -7.35% |
Operating Income | $-4.67B | $1.68B | -377.42% |
Net Income | $-5.85B | $2.74B | -313.05% |
EPS (Basic) | $-4.93 | $2.27 | -317.18% |
EPS (Diluted) | $-4.93 | $2.26 | -318.14% |
R&D Expense | $167M | $150M | +11.33% |
SG&A Expense | $12.98B | $7.29B | +78.15% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $81.79B | $88.29B | -7.36% |
Current Assets | $10.13B | $7.66B | +32.29% |
Total Liabilities | $40B | $38.96B | +2.66% |
Current Liabilities | $8.78B | $7.25B | +21.03% |
Stockholders' Equity | $41.66B | $49.19B | -15.29% |
Cash & Equivalents | $2.62B | $1.33B | +96.03% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $4.46B | $4.18B | +6.64% |
Investing Cash Flow | $-1.83B | $-1.02B | -79.18% |
Financing Cash Flow | $-1.25B | $-3.01B | +58.41% |
Dividends Paid | $1.9B | $1.93B | -1.71% |
Share Buybacks | $436M | $988M | -55.87% |
D&A | $968M | $948M | +2.11% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
ROE | -14.0% | — | — |
ROA | -7.1% | — | — |
Current Ratio | $1.154 | — | — |
Debt to Equity | $0.96 | — | — |
Other companies in Packaged Foods & Meats
KHC's net loss of $5.85B in FY2025 was primarily driven by a 78.1% surge in SG&A expenses to $12.98B, up from $7.29B in the prior year, which most likely reflects large goodwill or intangible asset impairment charges. Despite this, operating cash flow remained healthy at $4.46B, confirming the loss was largely non-cash in nature.
Yes, KHC generated $4.46B in operating cash flow in FY2025, a 6.6% increase from $4.18B in the prior year, demonstrating that its core business operations continue to produce cash. The large net loss of $5.85B is primarily attributable to non-cash charges such as depreciation, amortization ($968M), and likely significant impairment write-downs.
KHC paid $1.90B in dividends in FY2025 despite reporting a net loss of $5.85B, and operating cash flow of $4.46B technically covers the payout. However, the sustained losses, equity erosion (down 15.3% to $41.66B), and high leverage (debt-to-equity of ~0.96) create meaningful risk that the dividend could come under pressure if cash generation weakens.
KHC's total assets shrank 7.4% to $81.79B, largely reflecting impairment write-downs, while total liabilities rose 2.7% to $40.0B, causing stockholders' equity to fall 15.3% to $41.66B. Cash and equivalents nearly doubled to $2.62B, providing some near-term liquidity cushion despite the overall balance sheet deterioration.
The three most pressing risks are: (1) potential for further goodwill/brand impairment charges given the already massive SG&A spike to $12.98B; (2) continued gross margin compression as revenue declined faster than costs, with gross profit down 7.3% to $8.31B; and (3) balance sheet leverage with liabilities of $40.0B nearly matching equity of $41.66B, limiting financial flexibility.