Packaged foods company Kraft Heinz (NASDAQ: KHC) beat Wall Street’s revenue expectations in Q1 CY2026, but sales were flat year on year at $6.05 billion. Its non-GAAP profit of $0.58 per share was 15.4% above analysts’ consensus estimates.
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Kraft Heinz (KHC) Q1 CY2026 Highlights:
- Revenue: $6.05 billion vs analyst estimates of $5.90 billion (flat year on year, 2.5% beat)
- Adjusted EPS: $0.58 vs analyst estimates of $0.50 (15.4% beat)
- Adjusted EBITDA: $1.39 billion vs analyst estimates of $1.24 billion (23% margin, 12.5% beat)
- Management reiterated its full-year Adjusted EPS guidance of $2.04 at the midpoint
- Operating Margin: 18.9%, down from 19.9% in the same quarter last year
- Free Cash Flow Margin: 12.7%, up from 8% in the same quarter last year
- Organic Revenue was flat year on year (miss)
- Sales Volumes fell 1.2% year on year (-5.6% in the same quarter last year)
- Market Capitalization: $26.73 billion
Company Overview
The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ: KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $24.99 billion in revenue over the past 12 months, Kraft Heinz is one of the most widely recognized consumer staples companies. Its influence over consumers gives it negotiating leverage with distributors, enabling it to pick and choose where it sells its products (a luxury many don’t have). However, its scale is a double-edged sword because there are only so many big store chains to sell into, making it harder to find incremental growth. To accelerate sales, Kraft Heinz likely needs to optimize its pricing or lean into new products and international expansion.
As you can see below, Kraft Heinz’s demand was weak over the last three years. Its sales fell by 2.5% annually as consumers bought less of its products.
This quarter, Kraft Heinz’s $6.05 billion of revenue was flat year on year but beat Wall Street’s estimates by 2.5%.
Looking ahead, sell-side analysts expect revenue to decline by 2.1% over the next 12 months, similar to its three-year rate. This projection doesn't excite us and suggests its newer products will not catalyze better top-line performance yet.
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Volume Growth
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.
To analyze whether Kraft Heinz generated its growth (or lack thereof) from changes in price or volume, we can compare its volume growth to its organic revenue growth, which excludes non-fundamental impacts on company financials like mergers and currency fluctuations.
Over the last two years, Kraft Heinz’s average quarterly volumes have shrunk by 3.6%. This isn’t ideal for a consumer staples company, where demand is typically stable. In the context of its 2.7% average organic sales declines, we can see that most of the company’s losses have come from fewer customers purchasing its products.
In Kraft Heinz’s Q1 2026, sales volumes dropped 1.2% year on year. This result was a step in the right direction compared to its historical levels.
Key Takeaways from Kraft Heinz’s Q1 Results
We were impressed by how significantly Kraft Heinz blew past analysts’ gross margin expectations this quarter. We were also excited its EPS outperformed Wall Street’s estimates. Full-year EPS was reiterated, showing the business remains on track. On the other hand, its organic revenue missed. Overall, this print had some key positives. The stock traded up 2.3% to $23.06 immediately following the results.
Indeed, Kraft Heinz had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
