(Reuters) -Kraft Heinz lowered its annual sales and profit forecasts on Wednesday, signaling persistent weakness in demand for its pricier snacks and pantry condiments from budget-conscious consumers amid
macroeconomic uncertainty.
Shares of the company, which has said it would split into two with one focused on groceries and the other on sauces and spreads, were down about 1% in premarket trading.
Kraft Heinz now expects 2025 organic net sales to fall 3% to 3.5%, compared with its prior target of a decline between 1.5% and 3.5%, weighed down by weakness in markets including Indonesia and tepid demand from retailers in the U.S.
"The operating environment remains challenging," Kraft CEO Carlos Abrams-Rivera said in a statement. "We see these pressures as persisting beyond the fourth quarter, leading to a longer path to consumer recovery."
Cost-conscious consumers have switched to cheaper store brands due to high inflation and economic uncertainty.
Packaged foods peer Hormel Foods also posted preliminary quarterly results below expectations on Wednesday, amid pressures on demand and impacts of inflationary pressures and operational disruptions.
Multiple prices hikes for some of its products, such as coffee and meats, to offset the higher costs of those commodities, also added to the demand woes.
The ketchup maker forecast annual adjusted earnings per share of between $2.50 and $2.57, compared with its prior expectation of $2.51 to $2.67.
The company reported a net sales decline of 2.3% to $6.24 billion in the third quarter ended September 27, compared with analysts' estimate of $6.26 billion, according to data compiled by LSEG.
Net sales in its North America segment fell 3.8%, while overall prices for the company increased by 1 percentage point.
Excluding items, it reported quarterly earnings per share of 61 cents, compared with estimates of 58 cents.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Sriraj Kalluvila)
