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 2.3% to $6.2 billion for the three months ended September 27, 2025 compared to $6.4 billion for the three months ended September 28, 2024, including the favorable impact of foreign currency (0.2 pp). Organic Net Sales decreased 2.5% to $6.2 billion for the three months ended September 27, 2025 compared to $6.4 billion for the three months ended September 28, 2024, primarily due to the unfavorable volume/mix (3.5 pp), which more than offset higher pricing (1.0 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 3.5% to $18.6 billion for the nine months ended September 27, 2025 compared to $19.3 billion for the nine months ended September 28, 2024, including the unfavorable impact of foreign currency (0.4 pp). Organic Net Sales decreased 3.1% to $18.6 billion for the nine months ended September 27, 2025 compared to $19.2 billion for the nine months ended September 28, 2024, primarily due to the unfavorable volume/mix (3.9 pp), which more than offset higher pricing (0.8 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) increased 1,114.9% to income of $1.0 billion for the three months ended September 27, 2025 compared to losses of $101 million for the three months ended September 28, 2024, primarily due to non-cash impairment losses that were $1.4 billion lower in the current year period. In addition to the impact of these non-cash impairment losses, operating income/(loss) decreased $267 million due to inflationary pressures in commodity and manufacturing costs that outpaced our efficiency initiatives, unfavorable volume/mix, increased SG&A, primarily due to increased advertising expenses, and unfavorable changes in unrealized losses/(gains) on commodity hedges. These unfavorable impacts to operating income/(loss) were partially offset by higher pricing.

Net income/(loss) increased 311.4% to income of $613 million for the three months ended September 27, 2025 compared to losses of $290 million for the three months ended September 28, 2024. This increase was due to the favorable changes in operating income/(loss) factors discussed above, partially offset by higher income tax expense, unfavorable changes in other expense/(income), and higher interest expense.

•Our effective tax rate for the three months ended September 27, 2025 was an expense of 24.0% on pre-tax income. Our effective tax rate for the three months ended September 28, 2024 was an expense of 2.5% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 22.9%. 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 $22 million of income for the three months ended September 27, 2025 compared to $48 million of income for the three months ended September 28, 2024. This change was primarily driven by a $44 million net loss on the sale of a business recognized in the third quarter of 2025 associated with the Italy Infant Transaction, partially offset by an $18 million increase in interest income primarily due to interest earned on our available-for-sale securities.

Adjusted Operating Income decreased 16.9% to $1.1 billion for the three months ended September 27, 2025 compared to $1.3 billion for the three months ended September 28, 2024, primarily due to inflationary pressures in commodity and manufacturing costs that outpaced our efficiency initiatives, unfavorable volume/mix, and increased SG&A, primarily due to increased advertising expenses. These unfavorable impacts more than offset higher pricing and the favorable impact of foreign currency (0.1 pp).

Operating income/(loss) decreased 433.9% to a loss of $5.8 billion for the nine months ended September 27, 2025 compared to income of $1.7 billion for the nine months ended September 28, 2024, primarily due to non-cash impairment losses that were $7.0 billion higher in the current year period. In addition to the impact of these non-cash impairment losses, operating income/(loss) decreased $457 million due to inflationary pressures in commodity and manufacturing costs that outpaced our efficiency initiatives, unfavorable volume/mix, 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 1,158.0% to a loss of $6.5 billion for the nine months ended September 27, 2025 compared to income of $614 million for the nine months ended September 28, 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 nine months ended September 27, 2025 was an expense of 2.4% on pre-tax loss, which included the net unfavorable effective tax rate impact of non-deductible goodwill impairments of 24.8%. Our effective tax rate for the nine months ended September 28, 2024 was an expense of 43.9% on pre-tax income, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 21.5%. The year-over-year change in the effective tax rate for the nine 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 $120 million of income for the nine months ended September 27, 2025 compared to $56 million of income for the nine months ended September 28, 2024. This change was primarily driven by a $36 million increase in interest income in 2025 compared to 2024 primarily due to interest earned our available-for-sale securities, and a $44 million net loss on the sale of a business recognized in 2025 compared to a $78 million net loss on the sale of businesses in 2024.

Adjusted Operating Income decreased 9.9% to $3.6 billion for the nine months ended September 27, 2025 compared to $4.0 billion for the nine months ended September 28, 2024, primarily due to inflationary pressures in commodity and manufacturing costs that outpaced our efficiency initiatives, unfavorable volume/mix, and the unfavorable impact of foreign currency (0.1 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 increased 316.7% to $0.52 for the three months ended September 27, 2025 compared to $(0.24) for the three months ended September 28, 2024, primarily due to the net income/(loss) factors discussed above and 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 16, Earnings Per Share, for more information on our weighted average shares outstanding.

Adjusted EPS decreased 18.7% to $0.61 for the three months ended September 27, 2025 compared to $0.75 for the three months ended September 28, 2024. This decrease was primarily due to lower Adjusted Operating Income, higher taxes on adjusted earnings, and higher interest expense, which more than offset the favorable changes in other expense/(income) and the favorable impact of our common stock repurchases.

Diluted EPS decreased 1,194.0% to $(5.47) for the nine months ended September 27, 2025 compared to $0.50 for the nine months ended September 28, 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 16, Earnings Per Share, for more information on our weighted average shares outstanding.

Adjusted EPS decreased 13.5% to $1.92 for the nine months ended September 27, 2025 compared to $2.22 for the nine months ended September 28, 2024. This decrease was primarily due to lower Adjusted Operating Income, higher taxes on adjusted earnings, and higher interest expense, which more than offset the favorable impact of our common stock repurchases and favorable changes in other expense/(income).