The Kraft Heinz Company (KHC) Q4 2025 Prepared Remarks earnings summary

Executive summary

• 2025 saw significant year-over-year declines in revenue and profit, with organic net sales pressured by market share losses, especially in U.S. retail and Away From Home channels.

• Growth in emerging markets and Canada was offset by declines in the U.S. and developed international markets.

• The company reported a $4.7 billion operating loss due to $9.3 billion in non-cash impairment losses, while adjusted operating income was $4.7 billion, down 11.5%.

• Free cash flow improved nearly 16% year-over-year to $3.7 billion.

• The planned separation was paused to focus on operational recovery and sustainable, profitable growth.

Financial highlights

• FY 2025 organic net sales declined 3.4% to $24.9 billion; Q4 organic net sales down 4.2%.

• Adjusted gross profit margin for FY 2025 was 33.5%, down 120 basis points; Q4 margin at 33.1%.

• Adjusted operating income for FY 2025 was $4.7 billion, down 11.5%; Q4 adjusted operating income down 15.9%.

• Adjusted EPS for FY 2025 was $2.60, down 15%; Q4 adjusted EPS was $0.67, down 20%.

• Free cash flow for FY 2025 was $3.7 billion, up 15.9%, with a conversion rate of 119%.

Outlook and guidance

• 2026 organic net sales expected to decline 1.5% to 3.5%, including a 100 basis point SNAP headwind.

• Adjusted gross profit margin projected to decline 25–75 basis points year-over-year.

• Constant currency adjusted operating income expected to fall 14%–18%; adjusted EPS guidance is $1.98–$2.10.

• $600 million incremental investment planned for 2026 in marketing, sales, R&D, and product quality.

• Free cash flow conversion expected at approximately 100% in 2026.