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 increased 0.8% to $6.0 billion for the three months ended March 28, 2026 compared to $6.0 billion for the three months ended March 29, 2025, including the favorable impact of foreign currency (1.9 pp) and unfavorable impact of acquisitions and divestitures (0.7 pp). Organic Net Sales decreased 0.4% to $5.9 billion for the three months ended March 28, 2026 compared to $5.9 billion for the three months ended March 29, 2025, primarily due to the unfavorable volume/mix (1.2 pp), which more than offset higher pricing (0.8 pp). Pricing was higher in each segment. Volume/mix was unfavorable in each segment.

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 4.3% to income of $1.1 billion for the three months ended March 28, 2026 compared to income of $1.2 billion for the three months ended March 29, 2025, primarily due to increased advertising expenses, inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives, separation costs incurred in the current year period, and increased restructuring costs. These unfavorable impacts to operating income/(loss) were partially offset by favorable changes in unrealized losses/(gains) on commodity hedges, higher pricing, and certain nonrecurring procurement cost recoveries.

Net income/(loss) increased 11.9% to income of $799 million for the three months ended March 28, 2026 compared to income of $714 million for the three months ended March 29, 2025. This increase was primarily driven by lower income tax expense and favorable changes in other expense/(income), partially offset by the unfavorable changes in operating income/(loss) factors discussed above and higher interest expense.

•Our effective tax rate for the three months ended March 28, 2026 was an expense of 20.9% on pre-tax income, compared to an expense of 29.9% for the three months ended March 29, 2025. The year-over-year change in the effective tax rate for the three-month period was primarily driven by certain favorable discrete income tax items, including the tax benefit on the Italy Infant Transaction, the revaluation of deferred tax balances due to changes in U.S. state tax rates, and the reversal of uncertain tax position reserves in certain U.S. states and non-U.S. jurisdictions.

•Other expense/(income) was $101 million of income for the three months ended March 28, 2026 compared to $51 million of income for the three months ended March 29, 2025. This change was primarily driven by a $41 million favorable change in net pension and postretirement non-service benefits related to the settlement of our U.S. Retiree Life Insurance Plan in the first quarter of 2026 and a $19 million increase in interest income.

Adjusted Operating Income decreased 11.8% to $1.1 billion for the three months ended March 28, 2026 compared to $1.2 billion for the three months ended March 29, 2025, primarily due to increased advertising expenses, inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives, and unfavorable volume/mix. These unfavorable impacts more than offset higher pricing, certain nonrecurring procurement cost recoveries, and the favorable impact of foreign currency (0.7 pp).

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 increased 13.6% to $0.67 for the three months ended March 28, 2026 compared to $0.59 for the three months ended March 29, 2025, primarily due to the net income/(loss) factors discussed above.

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

Adjusted EPS decreased 6.5% to $0.58 for the three months ended March 28, 2026 compared to $0.62 for the three months ended March 29, 2025. This decrease was primarily due to lower Adjusted Operating Income, which more than offset lower taxes on adjusted earnings.