(Reuters) -Kraft Heinz on Tuesday slashed its full-year organic sales and profit forecasts, as demand for its snacks and ready-to-eat meal kits takes a hit from higher prices and an uncertain economic backdrop wrought by recent U.S. tariffs.
Major packaged food firms such as Kraft Heinz, Conagra and General Mills have seen lackluster sales in the United States over the past year as volumes remained muted despite selective price reductions and higher promotions.
President Donald Trump’s steep tariffs on trading partners have also fueled fears of high inflation and stagnation in economic growth, prompting Americans to tighten spending as many everyday essentials could become more expensive.
“We are also closely monitoring implications from market tensions such as tariffs, inflation, and the consequences to consumer behavior,” Kraft Heinz CEO Carlos Abrams-Rivera said, adding that the environment remained “volatile”.
Slowing demand for packaged meals such as Mac & Cheese, Lunchables and condiments such as mayonnaise has hurt Kraft Heinz, with budget-strained customers hunting for more affordable alternatives.
The company now expects fiscal year 2025 organic net sales to decline between 1.5% and 3.5%, from its prior forecast of flat to down 2.5%.
The Heinz ketchup maker projected adjusted earnings per share of $2.51 to $2.67, from a prior range of $2.63 to $2.74.
For the first quarter ended March 29, it posted net sales of $6 billion, below analysts’ average estimate of $6.02 billion, according to data compiled by LSEG.
PepsiCo last week cut its annual profit forecast, warning of higher production costs and subdued consumer spending due to uncertainty fueled by Trump’s expansive tariffs.
(Reporting by Savyata Mishra in Bengaluru; Editing by Devika Syamnath)
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