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 1.9% to $6.4 billion for the three months ended June 28, 2025 compared to $6.5 billion for the three months ended June 29, 2024, including the favorable impacts of foreign currency (0.1 pp). Organic Net Sales decreased 2.0% to $6.3 billion for the three months ended June 28, 2025 compared to $6.5 billion for the three months ended June 29, 2024, primarily due to the unfavorable volume/mix (2.7 pp), which more than offset higher pricing (0.7 pp). Pricing was higher in each segment. Volume/mix in North America and International Developed Markets was unfavorable, while volume/mix in Emerging Markets was favorable.

Net sales decreased 4.2% to $12.4 billion for the six months ended June 28, 2025 compared to $12.9 billion for the six months ended June 29, 2024, including the unfavorable impacts of foreign currency (0.8 pp) and acquisitions and divestitures (0.1 pp). Organic Net Sales decreased 3.3% to $12.4 billion for the six months ended June 28, 2025 compared to $12.8 billion for the six months ended June 29, 2024, primarily due to the unfavorable volume/mix (4.2 pp), which more than offset higher pricing (0.9 pp). Pricing was higher in each segment. Volume/mix in North America and International Developed Markets was unfavorable, while volume/mix in Emerging Markets was favorable.

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 1,627.6% to a loss of $8.0 billion for the three months ended June 28, 2025 compared to income of $522 million for the three months ended June 29, 2024, primarily due to non-cash impairment losses that were $8.4 billion higher in the current year period. In addition to the impact of these non-cash impairment losses, operating income/(loss) decreased $84 million driven by increased commodity cost inflation, which more than offset our efficiency initiatives, and unfavorable volume/mix. These unfavorable impacts to operating income/(loss) were partially offset by higher pricing, decreased SG&A, primarily due to lower advertising expense, and favorable changes in unrealized losses/(gains) on commodity hedges.

Net income/(loss) decreased 7,923.0% to a loss of $7.8 billion for the three months ended June 28, 2025 compared to income of $100 million for the three months ended June 29, 2024. This decrease was due to the unfavorable changes in operating income/(loss) factors discussed above, higher interest expense, and unfavorable changes in other expense/(income), partially offset by lower income tax expense.

•Our effective tax rate for the three months ended June 28, 2025 was a benefit of 4.2% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 21.6%. Our effective tax rate for the three months ended June 29, 2024 was an expense of 71.1% on pre-tax income, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 50.8%. The year-over-year change in the effective tax rate for the three-month period was primarily driven by the impact of non-deductible goodwill impairments and 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.

•Other expense/(income) was $47 million of income for the three months ended June 28, 2025 compared to $55 million of income for the three months ended June 29, 2024.

Adjusted Operating Income decreased 7.5% to $1.3 billion for the three months ended June 28, 2025 compared to $1.4 billion for the three months ended June 29, 2024, primarily driven by increased commodity cost inflation, which more than offset our efficiency initiatives, and unfavorable volume/mix. These unfavorable impacts more than offset higher pricing, decreased SG&A, primarily due to lower advertising expenses, and the favorable impact of foreign currency (0.2 pp).

Operating income/(loss) decreased 471.6% to a loss of $6.8 billion for the six months ended June 28, 2025 compared to income of $1.8 billion for the six months ended June 29, 2024, primarily non-cash impairment losses that were $8.4 billion higher in the current year period. In addition to the impact of these non-cash impairment losses, operating income/(loss) decreased $190 million due to unfavorable volume/mix, increased commodity cost inflation, which more than offset our efficiency initiatives, and unfavorable changes in unrealized losses/(gains) on commodity hedges. These unfavorable impacts to operating income/(loss) were partially offset by higher pricing, and decreased SG&A, primarily due to decreased advertising expenses and lower variable compensation expense.

Net income/(loss) decreased 886.4% to a loss of $7.1 billion for the six months ended June 28, 2025 compared to income of $904 million for the six months ended June 29, 2024. This decrease was due to the unfavorable changes in operating income/(loss) factors discussed above and higher interest expense, partially offset by lower income tax expense and favorable changes in other expense/(income).

•Our effective tax rate for the six months ended June 28, 2025 was a benefit of 0.6% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 24.7%. Our effective tax rate for the six months ended June 29, 2024 was an expense of 34.4% on pre-tax income, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 12.4%. The year-over-year change in the effective tax rate for the six month period was primarily due to the impact of non-deductible goodwill impairments, and a less favorable geographic mix of pre-tax income in various non-U.S. jurisdictions.

•Other expense/(income) was $98 of income for the six months ended June 28, 2025 compared to $8 million of income for the six months ended June 29, 2024. This change was primarily driven by lapping the $79 million loss on the sale of business recognized in 2024, and an $18 million increase in interest income in 2025 compared to 2024 primarily due to interest earned our available-for-sale securities.

Adjusted Operating Income decreased 6.4% to $2.5 billion for the six months ended June 28, 2025 compared to $2.6 billion for the six months ended June 29, 2024, primarily driven by unfavorable volume/mix, increased commodity cost inflation, which more than offset our efficiency initiatives, and the unfavorable impact of foreign currency (0.3 pp). These unfavorable impacts more than offset higher pricing and decreased SG&A, primarily due to decreased advertising expenses and lower variable compensation expense.

Diluted EPS:

Diluted EPS decreased 8,350.0% to $(6.60) for the three months ended June 28, 2025 compared to $0.08 for the three months ended June 29, 2024, primarily due to the net income/(loss) factors discussed above, which more than offset the favorable impact of our common stock repurchases.

(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 11.5% to $0.69 for the three months ended June 28, 2025 compared to $0.78 for the three months ended June 29, 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.

Diluted EPSdecreased 908.1% to $(5.98) for the six months ended June 28, 2025 compared to $0.74 for the six months ended June 29, 2024, primarily due to the net income/(loss) factors discussed above, which more than offset the favorable impact of our common stock repurchases.

(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 10.9% to $1.31 for the six months ended June 28, 2025 compared to $1.47 for the six months ended June 29, 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).