Kraft Heinz on Thursday projected fiscal 2026 capital spending of about $950 million, an increase from the $801 million it recorded a year earlier. The announcement came a day after the packaged-foods company put on hold its proposal to split into two businesses and unveiled a new investment push to shore up performance.
The company said the decision to halt the separation - originally announced in September as a plan to create one groceries-focused firm and a second company centered on sauces and spreads - was driven by deteriorating conditions in the food industry. CEO Steve Cahillane characterized the pause as necessary and said the move should yield roughly $300 million in cost savings during 2026.
While the separation effort is being suspended for now, Cahillane did not rule out the possibility of pursuing a split at a later date, noting that the current challenges are "fixable and within our control." Instead of proceeding with the break-up, Kraft Heinz will redirect capital toward marketing and research initiatives, allocating a $600 million program intended to help revive its U.S. business, which has been affected by tepid demand.
The company said it expects to reduce headcount by about 60 positions as of December 27, with those cuts concentrated primarily outside the U.S. and Canada. That follows roughly 600 job eliminations reported by the company last year.
Shares of the company were down about 1% in premarket trading following the update. The firm emphasized the combination of higher planned capital expenditures and targeted marketing and R&D spending as its path to stabilizing growth, while the decision to pause the split simultaneously produces near-term cost savings.
Management framed the moves as a reallocation of resources to address soft consumer demand in the U.S. and to strengthen the business through promotional and product investment rather than through structural separation at this time.
Note: Information in this article is based solely on the company statements and the figures provided in the update.