Kraft Heinz Co

We disclose in this report certain non-GAAP financial measures. These non-GAAP financial measures assist management in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our underlying operations. For additional information and reconciliations to the most closely comparable financial measures presented in our condensed consolidated financial statements, which are calculated in accordance with U.S. GAAP see Non-GAAP Financial Measures.

Consolidated Results of Operations

Summary of Results:

Net Sales:

Net sales decreased 6.4% to $6.0 billion for the three months ended March 29, 2025 compared to $6.4 billion for the three months ended March 30, 2024, including the unfavorable impacts of foreign currency (1.6 pp) and acquisitions and divestitures (0.1 pp). Organic Net Sales decreased 4.7% to $6.1 billion for the three months ended March 29, 2025 compared to $6.4 billion for the three months ended March 30, 2024, primarily due to the unfavorable volume/mix (5.6 pp), which more than offset higher pricing (0.9 pp). Higher pricing in North America and Emerging Markets was partially offset by lower pricing in International Developed Markets. Volume/mix was unfavorable across all segments.

Net Income/(Loss):

(a) Adjusted Operating Income is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Operating income/(loss) decreased 8.1% to income of $1.2 billion for the three months ended March 29, 2025 compared to income of $1.3 billion for the three months ended March 30, 2024, primarily due to unfavorable volume/mix, unfavorable changes in unrealized losses/(gains) on commodity hedges, and increased procurement cost inflation, which more than offset our efficiency initiatives. These unfavorable impacts to operating income/(loss) were partially offset by decreased selling, general and administrative expenses (“SG&A”), primarily due to lower variable compensation expense and decreased advertising expenses, and higher pricing.

Net income/(loss) decreased 11.2% to income of $714 million for the three months ended March 29, 2025 compared to income of $804 million for the three months ended March 30, 2024. This decrease was due to the unfavorable changes in operating income/(loss) factors discussed above and higher income tax expense, partially offset by the favorable changes in other expense/(income).

•Our effective tax rate for the three months ended March 29, 2025 was an expense of 29.9% on pre-tax income, compared to an expense of 21.9% on pre-tax income for the three months ended March 30, 2024. The year-over-year increase in the effective tax rate for the three-month period was primarily driven by a less favorable geographic mix of pre-tax income in various non-U.S. jurisdictions primarily due to the changes made to our corporate entity structure in December 2024, and the unfavorable impact of certain discrete deferred tax adjustments.

•Other expense/(income) was $51 million of income for the three months ended March 29, 2025 compared to $47 million of expense for the three months ended March 30, 2024. This change was primarily driven by an $80 million net loss on the sale of business in the first quarter of 2024 and $92 million of favorable changes in derivative losses/(gains), partially offset by $85 million of unfavorable changes in net foreign exchange losses/(gains).

Adjusted Operating Income decreased 5.2% to $1.2 billion for the three months ended March 29, 2025 compared to $1.3 billion for the three months ended March 30, 2024, primarily driven by unfavorable volume/mix, increased procurement cost inflation, which more than offset our efficiency initiatives, and the unfavorable impact of foreign currency (0.8 pp). These unfavorable impacts more than offset decreased SG&A, primarily due to lower variable compensation expense and decreased advertising expenses, and higher pricing.

Diluted EPS:

(a) Adjusted EPS is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Diluted EPS decreased 10.6% to $0.59 for the three months ended March 29, 2025 compared to $0.66 for the three months ended March 30, 2024, primarily due to the net income/(loss) factors discussed above, which more than offset the favorable impact of our common stock repurchases.

(a) Adjusted EPS is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

(b) Includes the impact of the change in the weighted average shares of common stock outstanding, including dilutive effect, which is primarily due to shares purchased pursuant to our publicly announced share repurchase program. See Note 15, Earnings Per Share, for more information on our weighted average shares outstanding.

Adjusted EPS decreased 10.1% to $0.62 for the three months ended March 29, 2025 compared to $0.69 for the three months ended March 30, 2024. This decrease was primarily due to lower Adjusted Operating Income and higher taxes on adjusted earnings, which more than offset the favorable impact of our common stock repurchases and favorable changes in other expense/(income).