Kraft Heinz Reverses Spin-Off Plan, Bets on a $600 Million Internal Overhaul

Kraft Heinz is scrapping its previously announced plan to split the company into two independent entities and instead will pursue an internal turnaround funded by a $600 million investment to rejuvenate its core brands. The move coincides with a tepid 2026 forecast that falls well short of Wall Street expectations, leaving investors reassessing the stock’s path forward.

The company had touted a spin-off of its business into two segments—Global Taste Elevation Co. and North American Grocery Co.—as a key lever to unlock hidden value within the conglomerate. That plan has now been put on ice. Management will focus on internal restructuring, directing $600 million toward revitalizing flagship brands rather than pursuing a structural separation.

2026 guidance comes in well below expectations

Alongside the reversal of the split, Kraft Heinz issued its 2026 outlook, which disappointed analysts. The firm sees adjusted earnings per share (EPS) in the range of $1.98 to $2.10. That guidance sits notably below Wall Street consensus, which had been around $2.50 per share.

The company also projected organic revenue to decline by 1.5% to 3.5% for the year, citing ongoing inflationary pressures and headwinds from reduced U.S. government food assistance (SNAP) funding.

Should investors sell immediately? Or is it worth buying Kraft Heinz?

Q4 2025 results at a glance

The fourth-quarter results delivered a mixed picture alongside the strategic reversal:

• Adjusted EPS of $0.67, modestly above expectations of $0.61.
• Revenue of $6.35 billion, down 3.4% versus the prior year.
• Organic sales fell 4.2%, as volumes declined in core categories.

Analyst reaction and outlook

In response to the combination of a strategic retreat and weak full-year guidance, market participants began to reassess Kraft Heinz’s near-term trajectory. JPMorgan moved the shares from Neutral to Underweight and set a $22.00 price target, signaling meaningful downside from current levels. The analysts' concern centers on whether operational changes can stabilize volumes and protect margins quickly enough to reverse the trend.

Focus on marketing, products, and the dividend

With the divisional restructuring shelved, the company will instead emphasize operational improvements—particularly in marketing and product development for its weaker segments, such as deli meats and coffee. Despite the turbulence, Kraft Heinz reaffirmed its quarterly dividend at $0.40 per share, payable on March 27, 2026. Whether this payout suffices to offset growth concerns remains an open question given the fundamental challenges highlighted by the outlook.