The Kraft Heinz Company (KHC) Q2 2026 Prepared Remarks earnings summary

Executive summary

• Net sales for Q2 2026 were $6.3B, down 1.4% year-over-year; organic net sales declined 1.3%.

• Delivered second quarter results ahead of expectations in U.S. retail, global away from home, and Emerging Markets.

• Increased 2026 incremental investment by $100 million to $700 million, focusing on marketing, R&D, and talent.

• Significant non-cash impairment charges for goodwill and intangible assets continued, though lower than prior year.

• Strategic focus on U.S. turnaround and accelerating international and Emerging Markets growth.

Financial highlights

• Q2 2026 Organic Net Sales: $6.2B, down 1.3% year-over-year; price increases contributed 1.3 percentage points, offset by a 2.6 percentage point decline in volume/mix.

• Adjusted gross profit margin was flat at 34.1% year-over-year, while reported gross margin decreased to 32.4%.

• Adjusted Operating Income for Q2 2026 was $1.0B, down 18.4% year-over-year, mainly due to higher advertising and inflationary costs.

• Adjusted EPS was $0.56 for the quarter, down 18.8% year-over-year; diluted EPS improved to $(4.60) from $(6.60).

• Free cash flow for the year-to-date rose 10% to $1.7B, with conversion up to 123%.

Outlook and guidance

• Raised full-year Organic Net Sales outlook to down 2% to down 0.5%; constant currency adjusted operating income guidance narrowed to down 18%-16%.

• Adjusted EPS expected in the range of $2.03-$2.09; effective tax rate ~24.5%.

• Free cash flow conversion expected at ~110% for the year.

• Capital expenditures for 2026 projected at $850M, focused on maintenance, technology, and growth investments.

• At least 6% of net sales to be invested in marketing; inflation expected slightly above 4%.