Kraft Heinz (NYSE:KHC) delivered Q1 earnings that topped analyst expectations, but a revenue shortfall and declining margins weighed on sentiment, pushing shares down 1% intra-day following the results.

The company reported adjusted earnings of $0.62 per share, beating the consensus estimate of $0.60. However, revenue fell slightly short at $6 billion, compared to analyst projections of $6.02 billion. Net sales dropped 6.4% year-over-year, while organic net sales declined 4.7%, reflecting a more cautious consumer environment.

Gross profit margins came under pressure, with reported and adjusted margins both settling at 34.4%, down 60 and 10 basis points respectively. Operating income also weakened, falling 8.1% year-over-year, while adjusted operating income slid 5.2%.

Looking ahead, Kraft Heinz guided second-quarter 2025 earnings per share between $2.51 and $2.67, a range that includes the current analyst consensus of $2.67, signaling a cautious but steady outlook for the remainder of the year.