During the September 11 episode of Mad Money, a caller asked whether to buy, sell, or hold shares of The Kraft Heinz Company (NYSE:KHC). Jim Cramer replied:
No, I don’t want you to do that… And I’ll tell you why. Because it’s not that I believe in the greater man theory, but this Steve Cahillane, who’s the CEO, he saved Kellogg and made people a ton of money. He’s going to do the same thing with Kraft Heinz. Let’s give him a chance. Let’s give him six months, okay? I think he’d appreciate that if we give him six months. He’s been here for a while, and he’s a… person [who] really likes to… [take] action. Don’t leave it. Please don’t leave Kraft Heinz.
The comments build on his June 2 view that he was willing to “take on the risk” of owning Kraft Heinz because of Cahillane’s record at Kellogg. At the time, however, Cramer said he had “not all that much faith in Kraft or Heinz after previous management gutted the company.”
Kraft Heinz Still Needs Volume Growth
The Kraft Heinz Company’s second-quarter results show why the turnaround remains unfinished. Net sales fell 1.4% year over year to $6.26 billion, while organic net sales declined 1.3%. Adjusted operating income fell 18.4% to $1 billion, while North American sales declined 2.7%. Management raised its 2026 organic net-sales outlook to a decline of 0.5% to 2%, from the previous range of a 1.5% to 3.5% decline. It also increased incremental investment by $100 million to approximately $700 million in 2026, with the company targeting a return to volume-led, sustainable and profitable growth.
On September 2, Kraft Heinz said it will hold an Investor Day on November 12 to present its long-term strategy for “sustainable volume-led and profitable growth.” Cahillane said, “Our brand investments are gaining traction and driving improved performance.”
Higher Investment Has Yet to Restore Growth
The Kraft Heinz Company is spending more to revive its brands, but the latest results have yet to show a return to growth. The company is committing approximately $700 million to incremental investment while organic sales remain negative and adjusted operating income has fallen sharply. It also recorded $7.4 billion of gross impairment losses in the second quarter, including $4.9 billion of non-cash intangible-asset impairment losses. As of June 27, reporting units carrying $19.7 billion of goodwill had 10% or less excess fair value, leaving them at heightened risk of additional impairment if the underlying assumptions deteriorated.
The company still needs to show that higher spending can produce sustained volume growth without further weakening profitability and cash generation. Its improved 2026 sales outlook reduces the expected decline but does not yet represent a return to organic sales growth.
Hedge Funds’ Positions
According to Insider Monkey, which tracks more than 1,000 hedge funds, 62 hedge funds held Kraft Heinz in the second quarter, compared with 60 in the first quarter. Of those funds, Berkshire Hathaway was the top shareholder with 325.6 million shares. Short interest was approximately 7.2% to 8.3% of the float. For investors going over Cramer’s six-month thesis, the focus is whether The Kraft Heinz Company can convert its increased brand investment into actual volume growth. The November 12 Investor Day should provide a closer look at how CEO Cahillane plans to do that.
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