KHC
The Kraft Heinz Company
Consumer Defensive · Packaged Foods · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score of 31.9/100 reflects near-zero scores in growth and profitability, driven by a 3.5% revenue decline, a net loss of -$5,846,000,000, and uniformly negative margin and return metrics in FY2025 [growth.revenue.yoy, growth.net_income.yoy, profitability.net_margin_pct].
- Partial credit in financial health and momentum reflects the low debt-to-equity ratio of 0.46 and the strong sequential earnings recovery from 2025Q2 onward, which prevented an even lower total score [financial_health.debt_to_equity, momentum.net_income_quarterly].
- The dividend factor contributed modestly due to four consecutive years of $1.60 per share, but was tempered by the negative payout ratio, and the absence of any macro theme assignment meant zero theme score contribution [dividend.dps_trend, dividend.payout_ratio, theme.none].
Why Not Higher
- Profitability was the single largest drag — with net margin of -23.4%, operating margin of -18.7%, and ROA of -7.1%, the model awarded zero profitability score, which alone severely limits the composite total [profitability.net_margin_pct, profitability.operating_margin_pct, profitability.roa_pct].
- KHC is not assigned to any of the 24 tracked macro themes, meaning it received no theme score contribution, and the interest coverage ratio of -4.9 further capped the financial health score [theme.none, financial_health.interest_coverage].
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue declined from $25,846,000,000 in FY2024 to $24,942,000,000 in FY2025, a drop of 3.5%. Net income fell from $2,744,000,000 in FY2024 to -$5,846,000,000 in FY2025 (-313.0%), and diluted EPS moved from $2.26 in FY2024 to -$4.93 in FY2025 (-318.1%).
The model penalized KHC heavily for simultaneous top-line contraction and a dramatic swing to a net loss, leaving very little room for a positive growth score.
In FY2025, KHC reported a net margin of -23.4%, an operating margin of -18.7%, and a return on assets of -7.1%, all deeply negative.
Across every profitability dimension available, the company generated losses relative to revenue and assets in FY2025, leaving no basis for the model to award any profitability score.
KHC's debt-to-equity ratio in FY2025 was 0.46, suggesting a relatively modest leverage level, while total assets stood at $81,786,000,000 in FY2025. However, the interest coverage ratio in FY2025 was -4.9, indicating operating income was insufficient to cover interest expense.
The model appears to have rewarded the low leverage ratio and large asset base while penalizing the negative interest coverage, producing a middling score that reflects this mixed picture.
After a severe net income loss of -$7,824,000,000 in 2025Q2, net income recovered to $615,000,000 in 2025Q3, $651,000,000 in 2025Q4, and $798,000,000 in 2026Q1. Operating income followed a similar recovery, rising from -$7,974,000,000 in 2025Q2 to $1,025,000,000 in 2025Q3, $1,084,000,000 in 2025Q4, and $1,145,000,000 in 2026Q1, even as quarterly revenue showed a modest declining trend from $6,352,000,000 in 2025Q2 to $6,047,000,000 in 2026Q1.
The model recognized the strong sequential recovery in earnings and operating income over the most recent quarters, partially offset by a gradual softening in quarterly revenue, resulting in a near-midpoint momentum score.
KHC has maintained a consistent dividends per share of $1.60 across FY2022, FY2023, FY2024, and FY2025. However, the dividend payout ratio in FY2025 was -32.5%, reflecting that dividends were paid despite a net loss in that year.
The model rewarded the multi-year dividend consistency but tempered the score given the negative payout ratio in FY2025, which signals the dividend was not covered by earnings.
KHC is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment means the company did not receive any theme-related score contribution under the current methodology; this reflects the model's current classification state rather than a judgment on the company's business.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Kraft Heinz Company (KHC) posted a deeply troubled FY2025, with revenue declining 3.5% to $24,942,000,000 and net income swinging to a loss of -$5,846,000,000, producing a net margin of -23.4% and an operating margin of -18.7% [growth.revenue.yoy, growth.net_income.yoy, profitability.net_margin_pct]. The company's profitability metrics were uniformly negative across every dimension, including a return on assets of -7.1%, leaving no basis for a positive profitability score [profitability.roa_pct]. On the positive side, quarterly earnings showed a meaningful sequential recovery after a severe loss in 2025Q2, and the debt-to-equity ratio remained relatively modest at 0.46, though the interest coverage ratio of -4.9 signals that operating income still cannot cover interest expense [momentum.net_income_quarterly, financial_health.debt_to_equity, financial_health.interest_coverage]. KHC's overall profile warrants a Monitor Only designation given the combination of top-line contraction, deep losses, and an uncovered dividend [dividend.payout_ratio].
Plain English
Kraft Heinz had a rough year — sales shrank and the company lost billions of dollars, meaning it's spending more than it's making, and even the dividends it paid to shareholders weren't covered by actual profits [growth.revenue.yoy, growth.net_income.yoy, dividend.payout_ratio]. The one bright spot is that after a massive loss earlier in the year, the company's quarterly earnings have been recovering, and it doesn't carry an extreme amount of debt relative to its assets [momentum.net_income_quarterly, financial_health.debt_to_equity].
Bull Case vs. Bear Case
Bull Case
- Quarterly earnings staged a strong sequential recovery: after a net loss of -$7,824,000,000 in 2025Q2, net income rebounded to $615,000,000 in 2025Q3, $651,000,000 in 2025Q4, and $798,000,000 in 2026Q1, suggesting the worst of the losses may be behind the company [momentum.net_income_quarterly].
- Operating income followed the same recovery trajectory, rising from -$7,974,000,000 in 2025Q2 to $1,145,000,000 in 2026Q1, indicating improving operational execution in recent quarters [momentum.operating_income_quarterly].
- KHC's debt-to-equity ratio of 0.46 in FY2025 reflects a relatively modest leverage level, and total assets of $81,786,000,000 provide a substantial balance sheet base [financial_health.debt_to_equity, financial_health.total_assets].
Bear Case
- Revenue declined 3.5% year-over-year to $24,942,000,000 in FY2025, and net income collapsed by 313% to -$5,846,000,000, reflecting simultaneous top-line contraction and a dramatic swing to a net loss [growth.revenue.yoy, growth.net_income.yoy].
- Every profitability metric in FY2025 was deeply negative — net margin of -23.4%, operating margin of -18.7%, and return on assets of -7.1% — leaving no dimension on which the company generated positive returns [profitability.net_margin_pct, profitability.operating_margin_pct, profitability.roa_pct].
- The dividend payout ratio of -32.5% in FY2025 reveals that KHC continued paying $1.60 per share in dividends despite reporting a net loss, meaning the dividend was entirely uncovered by earnings [dividend.payout_ratio, dividend.dps_trend].
What Could Change the Picture
Bullish Triggers
- A sustained return to positive and growing quarterly revenue — reversing the modest declining trend from $6,352,000,000 in 2025Q2 to $6,047,000,000 in 2026Q1 — alongside continued earnings recovery would materially improve the growth and momentum outlook [momentum.revenue_quarterly, momentum.net_income_quarterly].
- If the interest coverage ratio, currently at -4.9, were to turn positive, it would signal that operating income is sufficient to service debt, significantly reducing financial health risk [financial_health.interest_coverage].
Bearish Triggers
- A reversal of the recent quarterly earnings recovery — with net income or operating income declining again after the rebound from 2025Q2 — would eliminate the primary bullish signal currently supporting the momentum score [momentum.net_income_quarterly, momentum.operating_income_quarterly].
- Any further top-line deterioration beyond the already-declining quarterly revenue trend would compound concerns about the company's ability to cover its fixed costs and maintain its dividend [momentum.revenue_quarterly, dividend.payout_ratio].
Risk Profile
High RiskKHC's interest coverage ratio of -4.9 in FY2025 indicates that operating income was insufficient to cover interest expense, posing a meaningful debt-servicing risk despite the relatively low debt-to-equity ratio of 0.46 [financial_health.interest_coverage, financial_health.debt_to_equity]. While quarterly operating income has recovered sharply from -$7,974,000,000 in 2025Q2 to $1,145,000,000 in 2026Q1, the sustainability of this recovery remains a key risk factor [momentum.operating_income_quarterly].
Key Catalysts to Watch
The sequential recovery in quarterly operating income — from -$7,974,000,000 in 2025Q2 to $1,145,000,000 in 2026Q1 — represents the most visible near-term catalyst if the trend continues [momentum.operating_income_quarterly].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.