Brew Markets – February 11, 2026

Episode Title: Kraft Heinz Presses Pause on Split & Unity Hits Reset on Advertising
Host: Ann Berry
Guest/Co-host: John Crateau

Episode Overview

In this episode, Brew Markets host Ann Berry dives into three major stock market headlines of the day:

1. Kraft Heinz’s decision to pause its planned split and the impact of new leadership.
2. Unity’s steep stock drop following disappointing earnings and challenges in its advertising segment, set against wider AI disruption in gaming.
3. The broader market pulse: including jobs data, Fed rate speculation, and news from companies like Hasbro, Mattel, and Lyft.

1. Kraft Heinz: Split Paused, Turnaround Afoot

[00:32–04:45]

Main Points

• Background:
  Kraft Heinz had announced plans in September to split into two companies:

  • One to focus on shelf-stable meals/sauces (Heinz, Philadelphia, Kraft Mac and Cheese).
  • The other for North America staples (Oscar Mayer, Kraft Singles, Lunchables).
  • The logic for the split was met with skepticism, including from Warren Buffett and Berkshire Hathaway.

• Leadership Changes:

  • Steve Cahillane, ex-CEO of Kellanova, took over as CEO in January.
  • Within six weeks, he paused the split, calling Kraft Heinz’s issues “fixable and within our control” and announcing a $600M investment in marketing, sales, and R&D.

• Market Response:

  • Berkshire Hathaway, the company’s largest shareholder, voiced support for Cahillane’s plan.
  • However, skepticism remains. TD Cowan’s analyst noted:

    “Investors will view this negatively because it indicates that the businesses are not in strong enough condition to operate on a standalone basis.” ([03:53] Ann Barry, reading analyst comment)

• Financials:

  • 2025 Net sales: $26 billion (down 3.5%)
  • Adjusted operating income: Down 11.5%
  • 2026 forecast: More decline expected; organic net sales projected to dip by 1.5%–3.5%, with SNAP (Supplemental Nutrition Assistance Program) headwinds.

Notable Quotes

• “At the heart of this is really the message what a difference a new CEO can make.” ([02:34] Ann Barry)

• “If you’re going to go ahead and make change, you have to be thoughtful. But ultimately, you need to be decisive. You’ve got to have a bias to action…” ([03:11] Ann Barry)

2. Unity: Earnings Dive, AI Fears, and Industry Jitters

[04:54–14:34]

Main Points

• Company Profile:

  • Unity powers 2D/3D game development, behind mega-hits like Pokémon Go, Temple Run, and Hasbro’s digital titles.
  • Over 70% of top 1000 mobile and VR games use Unity; 28% of top 1000 PC games on Steam.

• Earnings Roundup:

  • Q4 EPS: $0.24 (beat by $0.03)
  • Revenue: $503 million (+10% YoY, beat estimates)
  • Create Solutions Segment: $165 million revenue (+8% YoY, with sticky and recurring revenue).

• Issues & Integrations:

  • The “Grow Solutions” advertising segment is a pain point—expected to be flat, despite its name.
  • Unity’s acquisition of IronSource (2022), aimed at boosting ad capabilities, is troubled: technical issues, culture clashes, unhappy clients.

    • “From the accounts that I read, the integration did not, both internally with culture clashes and externally with unhappy clients.” ([08:35] John Crateau)

• Strategic Response:

  • Launch of Vector—a new AI-native ad platform intended to replace IronSource.
  • CEO John Riccitiello projects Vector will generate over $1B annual revenue run rate by end of 2026, downplaying IronSource’s future role.

    • “…my sense is that investors are overly focused on the performance of IronSource, which is a legacy business for us that will get smaller and smaller … and won’t be material to our overall picture.” ([09:26] Ann Barry, quoting CEO)

• Stock Performance & AI Threat:

  • Stock down >30% on the day; down 50% YTD, but flat compared to a year ago (big up, big down).
  • “Project GENIE” – Google’s AI tool for virtual world creation spooked investors, leading to a previous 21% drop.
    • CEO maintains AI will “remove the drudgery” from development but claims Unity’s complex services are still needed.

    • “He said in general he sees AI as a tailwind to video game development, removing, as he said, the drudgery…” ([12:04] John Crateau)

    • “It’s one thing to create a world, but Unity argues that they’re going to create the whole game, which is interesting.” ([12:25] Ann Barry)

• Analyst Views Remain Divided:

  • Oppenheimer, Wells Fargo upgraded Unity recently (sees “moat” and value).
  • Barclays downgraded pre-earnings (now appears vindicated).
  • The sustainability of Unity’s dominance remains hotly contested.

• Hasbro Tie-In:

  • Hasbro’s success in digital gaming (Magic: The Gathering Arena, Monopoly Go), both developed with Unity, highlighted as proof of high-margin value and vendor strength.

    • “It just goes to show Unity’s value proposition had the light shone on it yesterday just from that one particular set of great results from Hasbro.” ([15:55] Ann Barry)

Notable Quotes/Moments

• “We’re going to hear that a lot over the course of today’s show.” (On disappointing guidance, [07:47] Ann Barry)

• “When it comes to the Grow division, ‘We expect revenue to be flat on a sequential basis’. That is not growing. So sort of ironic when they actually talk about their own business.” ([08:10] Ann Barry)

• “Even with today’s drop, shares are down 50% so far this year. But they’re nearly flat to where they were 12 months ago … it has been a roller coaster.” ([10:05] John Crateau, expanded by Ann Barry)

3. Broader Market Round-Up

[16:19–21:17]

Key Discussion Points

Jobs Data and Fed Implications

• January Jobs Report:
  • 130,000 jobs added (well above expectations); unemployment: 4.3% (down from 4.4%).
  • Health care (+82k jobs), construction (+33k), manufacturing (+5k) – other sectors flat.
  • Gov’t shed 35,000 jobs as part of public-sector cuts.
  • Implications for Fed policy: Strong jobs may delay or accelerate rate cuts with a new Fed chair in May.
  • Ongoing debate as to whether parts of US manufacturing remain in recession, and impact of “Liberation Day” tariffs.

Hasbro & Mattel: Divergent Fortunes in Gaming and Toys

• Hasbro:
  Four-year stock high, strong digital game performance (see Unity section above).
• Mattel:
  Stock down >20%. Holiday sales disappointing; late retailer orders short of expectations.
  • Full-year EPS guidance ($1.30) well below analyst expectations ($1.76).
  • Unable to replicate Hasbro’s digital success to offset toy market weakness.

Lyft: New Competition and Business Model Shifts

• Lyft stock: Down ~15% post-earnings; revenue in line but rider growth missed.
• Potential disruption: New ride-hail app “Empowerment” offers drivers 100% of fares for a flat $50/month. Illegal under NYC rules, but reminiscent of early Uber disruption tactics.

  • “Is this the moment where Uber the disruptor is disrupted? I don’t know. … It depends on what the drivers and consumers have to say about how compelling that model is.” ([20:21] Ann Barry)

Memorable Quotes & Lighter Moments

• On Unity’s Previous Name:

  “P.S. John, you said that originally the company was called Over the Edge Entertainment. Just my own view. I like that name better than Unity.” ([07:10] Ann Barry)

• On Games and Ads:

  “The advertising part is a big part of the gameplay.” ([14:19] John Crateau)

• Word Play:

  “Good use of drudgery. What a good word.” ([12:04] Ann Barry)

Timestamps for Key Segments

• Kraft Heinz Split & Turnaround: [00:32–04:45]
• Unity Background & Earnings: [04:54–09:00]
• Unity Advertising Woes & AI/Project GENIE: [09:01–13:55]
• Hasbro Digital Success: [14:34–15:55]
• Jobs Report & Manufacturing: [16:19–17:40]
• Mattel’s Struggle: [17:41–19:12]
• Lyft & Ride-Hail Competition: [19:24–20:21]

Conclusion

This Brew Markets episode broke down three major market stories with clear analysis and snappy dialogue. Kraft Heinz’s strategy shift under new leadership, Unity’s challenges amid AI disruption, and digital innovation driving winners (and losers) in gaming and toys all received critical, timely examination—peppered with quips and practical investing insights for listeners.

For a daily pulse on what moves the markets and why, Ann Barry’s Brew Markets continues to deliver the goods.