The Kraft Heinz Company (KHC) Q3 2025 Prepared Remarks earnings summary

Executive summary

• Net sales declined 2.3% year-over-year to $6.2 billion in Q3 2025, with organic net sales down 2.5% and modest top-line recovery driven by investments in marketing, R&D, and technology.

• Operating income rose to $1.0 billion due to lower impairment losses, but adjusted operating income fell 16.9% to $1.1 billion; adjusted EPS dropped 18.7% to $0.61.

• Free cash flow for the year-to-date rose 23.3% to $2.5 billion, with free cash flow conversion at 109%.

• $1.8 billion was returned to shareholders year-to-date through dividends and share repurchases.

• Announced plan to separate into two independent, publicly traded companies via a tax-free spin-off, expected completion in H2 2026.

Financial highlights

• Q3 2025 net sales: $6.2B (-2.3% YoY); organic net sales down 2.5%; adjusted operating income: $1.1B (-16.9% YoY); adjusted EPS: $0.61 (-18.7% YoY).

• Gross profit margin decreased 230 basis points to 31.9%; adjusted gross profit margin fell 200 basis points to 32.3%.

• Year-to-date free cash flow reached $2.5B, up over 20% from last year.

• Net income for Q3 was $613M, compared to a net loss of $290M in the prior year.

• For the nine months, net sales declined 3.5% to $18.6B, and adjusted EPS was $1.92, down from $2.22.

Outlook and guidance

• Full-year 2025 organic net sales expected to decline 3.0% to 3.5%, at the low end of previous guidance.

• Constant currency adjusted operating income now expected to decline 10% to 12% for the year.

• Adjusted EPS guidance narrowed to $2.50–$2.57, with an effective tax rate of ~26%.

• Free cash flow conversion expected at least 100%, up from prior 95%.

• 2025 capital expenditures expected to be ~$950M, down from $1.0B in 2024.