Kraft Heinz (Nasdaq: KHC) Q1 2026 results and reaffirmed 2026 outlook
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
The Kraft Heinz Company reported first quarter 2026 net sales of $6.0 billion, up 0.8%, while Organic Net Sales slipped 0.4% as modest price increases were offset by lower volume/mix. Gross profit margin improved to 36.7%, but Adjusted Gross Profit Margin edged down to 34.1%.
Operating income was $1.1 billion, down 4.3%, reflecting higher advertising, manufacturing and logistics inflation, separation and restructuring costs. Net income rose 11.9% to $799 million, lifting diluted EPS 13.6% to $0.67, though Adjusted EPS declined 6.5% to $0.58.
Net cash from operating activities increased 39.7% to $1.0 billion and Free Cash Flow rose 58.9% to $766 million, with Free Cash Flow Conversion at 111%. Kraft Heinz returned $474 million in cash dividends and reaffirmed its 2026 outlook, guiding Organic Net Sales down 1.5%–3.5%, Constant Currency Adjusted Operating Income down 14%–18%, Adjusted EPS of $1.98–$2.10, and Free Cash Flow Conversion of about 100%.
Positive
- None.
Negative
- None.
Insights
Q1 2026 shows resilient cash generation, but softer underlying earnings and a cautious full-year outlook.
Kraft Heinz grew net sales 0.8% to $6.047 billion, but Organic Net Sales declined 0.4% as volume/mix fell 1.2 percentage points despite 0.8 percentage points of pricing. This points to demand pressure in categories like coffee, cold cuts, and Indonesia.
Operating income fell 4.3% to $1.145 billion, and Adjusted Operating Income dropped 11.8% to $1.058 billion, mainly from higher advertising, manufacturing and logistics inflation, and restructuring and separation costs. Adjusted EPS declined to $0.58, even as GAAP EPS rose on lower taxes and other income.
Cash generation was a relative strength: operating cash flow rose 39.7% to $1.006 billion and Free Cash Flow increased 58.9% to $766 million, aided by working-capital improvements and derivative collateral. Management reaffirmed 2026 guidance, targeting Organic Net Sales down 1.5%–3.5%, Constant Currency Adjusted Operating Income down 14%–18%, and Adjusted EPS of $1.98–$2.10, reflecting about $600 million in incremental investments and an expected effective tax rate near 25%.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net sales: $6.047 billion
Organic Net Sales change: -0.4%
Operating income: $1.145 billion
+5 more
8 metrics
Net sales
$6.047 billion
Q1 2026, up 0.8% year over year
Organic Net Sales change
-0.4%
Q1 2026 vs prior-year period
Operating income
$1.145 billion
Q1 2026, down 4.3% year over year
Net income
$799 million
Q1 2026, up 11.9% year over year
Diluted EPS
$0.67
Q1 2026, up 13.6% vs $0.59 in Q1 2025
Adjusted EPS
$0.58
Q1 2026, down 6.5% vs $0.62 in Q1 2025
Free Cash Flow
$766 million
Q1 2026, up 58.9% year over year
2026 Adjusted EPS guidance
$1.98–$2.10
Full-year 2026 outlook reaffirmed
Key Terms
Organic Net Sales, Adjusted Operating Income, Free Cash Flow Conversion, Constant Currency Adjusted Operating Income, +1 more
5 terms
Organic Net Sales financial
"Net sales increased 0.8%; Organic Net Sales(1) decreased 0.4%"
Organic net sales represent the revenue generated from a company's core business activities, excluding the effects of acquisitions, divestments, or currency changes. It shows how well the company is growing through its existing products and services, similar to tracking how a plant grows from its own roots rather than by adding new plants. Investors use this measure to assess the true growth and health of a company's ongoing operations.
Adjusted Operating Income financial
"Adjusted Operating Income(1) decreased 11.8 percent versus the year-ago period"
Adjusted operating income is a company's profit from its main activities, excluding certain one-time or unusual costs and gains. It helps investors see how well the business is performing in its normal operations, without distractions from rare events or expenses. This way, they get a clearer picture of the company’s true profitability.
Free Cash Flow Conversion financial
"Free Cash Flow(1) was $0.8 billion, up 58.9 percent; and Free Cash Flow Conversion(1) increased 46pp to 111%"
Free cash flow conversion measures how effectively a company turns its reported profits into actual cash that can be used for growth, debt repayment, or dividends. It compares the cash generated after expenses to the company's net income, similar to how a person might compare their savings to their paycheck. High conversion indicates the company is efficient at translating profits into cash, which is important for investors assessing its financial health and flexibility.
Constant Currency Adjusted Operating Income financial
"Constant Currency Adjusted Operating Income(1)(2) down 14 percent to down 18 percent versus the prior year"
non-GAAP financial measures financial
"Organic Net Sales, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Operating Income ... are non-GAAP financial measures"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
Earnings Snapshot
Net sales: $6.047 billion · Guidance included
Q1 2026
Net sales
$6.047 billion
+0.8% YoY
Net income
$799 million
+11.9% YoY
Diluted EPS
$0.67
+13.6% YoY
Adjusted EPS
$0.58
-6.5% YoY
Free Cash Flow
$766 million
+58.9% YoY
Guidance
For 2026, Kraft Heinz expects Organic Net Sales down 1.5%–3.5%, Constant Currency Adjusted Operating Income down 14%–18%, Adjusted EPS of $1.98–$2.10, and Free Cash Flow Conversion of approximately 100%.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 6, 2026
The Kraft Heinz Co mpany
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of principal executive offices, including zip code)
(412 ) 456-5700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 6, 2026, The Kraft Heinz Company issued a press release announcing results for the first quarter ended March 28, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of, or otherwise regarded as filed under, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or in the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibit is furnished with this Current Report on Form 8-K.
| Exhibit No. | Description | |||||||
| 99.1 | The Kraft Heinz Company Press Release, dated May 6, 2026. | |||||||
| 104 | The cover page of The Kraft Heinz Company's Current Report on Form 8-K dated May 6, 2026, formatted in iXBRL. | |||||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| The Kraft Heinz Company | ||||||||
| Date: May 6, 2026 | By: | /s/ Andre Maciel | ||||||
| Andre Maciel | ||||||||
| Executive Vice President and Global Chief Financial Officer | ||||||||
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Exhibit 99.1
| Contacts: | Kraft Heinz Media Team | Anne-Marie Megela (investors) | |||||||||
| media@kraftheinz.com | Anne-Marie.Megela@kraftheinz.com | ||||||||||
KRAFT HEINZ REPORTS FIRST QUARTER 2026 RESULTS;
MAINTAINS 2026 FULL YEAR OUTLOOK
First Quarter Highlights
•Net sales increased 0.8%; Organic Net Sales(1) decreased 0.4%
•Gross profit margin increased 230 basis points to 36.7%; Adjusted Gross Profit Margin(1) decreased 30 basis points to 34.1%
•Operating income decreased 4.3% to $1.1 billion; Adjusted Operating Income(1) decreased 11.8% to $1.1 billion
•Year-to-date net cash provided by operating activities was $1.0 billion, up 39.7%; Free Cash Flow(1) was $0.8 billion, up 58.9%; and Free Cash Flow Conversion(1) increased 46pp to 111%
•Year-to-date return of capital to stockholders was $0.5 billion
PITTSBURGH & CHICAGO – May. 6, 2026 – The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the “Company”) today reported financial results for the first quarter of 2026.
“Our first quarter results demonstrate steady progress, and I am encouraged by the early signs of momentum we’re building,” said Steve Cahillane, CEO of Kraft Heinz. “The investments we made in 2025 are now driving early traction, with improving market share trends, particularly within must-win parts of our portfolio like Taste Elevation. This is proof that our brands respond well when we invest behind them.”
“Our goal is to ultimately deliver profitable growth through volume and market share recovery, while continuing to deliver strong Free Cash Flow. In 2026, we are focused on turning around our U.S. business and accelerating growth in our international markets. Our strategy is supported by incrementally investing the previously announced $600 million in the business, leveraging the Heinz brand, and continuing to capture white-space opportunities across Emerging Markets.”
Cahillane concluded, "While we are encouraged by the strong start to the year, we are reiterating our 2026 outlook. This reflects an operating environment that remains volatile, with increasing inflationary
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pressures and persistently low consumer sentiment. At the same time, we are retaining the flexibility to increase investments in areas that are delivering strong returns."
| Net Sales | ||||||||||||||||||||||||||||||||||||||
| In millions | ||||||||||||||||||||||||||||||||||||||
| Net Sales | Organic Net Sales(1) | |||||||||||||||||||||||||||||||||||||
| March 28, 2026 | March 29, 2025 | % Chg vs PY | YoY Growth Rate | Price | Volume/Mix | |||||||||||||||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| North America | $ | 4,458 | $ | 4,488 | (0.7) | % | (1.1) | % | 0.4 pp | (1.5) pp | ||||||||||||||||||||||||||||
| International Developed Markets | 843 | 817 | 3.2 | % | (0.1) | % | 0.2 pp | (0.3) pp | ||||||||||||||||||||||||||||||
Emerging Markets(a) | 746 | 694 | 7.6 | % | 3.8 | % | 4.4 pp | (0.6) pp | ||||||||||||||||||||||||||||||
| Kraft Heinz | $ | 6,047 | $ | 5,999 | 0.8 | % | (0.4) | % | 0.8 pp | (1.2) pp | ||||||||||||||||||||||||||||
(a) Emerging Markets represents the aggregation of our West and East Emerging Markets (“WEEM”) and Asia Emerging Markets (“AEM”) operating segments.
| Net Income/(Loss) and Diluted EPS | ||||||||||||||||||||
| In millions, except per share data | ||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| March 28, 2026 | March 29, 2025 | % Chg vs PY | ||||||||||||||||||
| Gross profit | $ | 2,219 | $ | 2,064 | 7.5 | % | ||||||||||||||
| Operating income/(loss) | 1,145 | 1,196 | (4.3) | % | ||||||||||||||||
| Net income/(loss) | 799 | 714 | 11.9 | % | ||||||||||||||||
| Net income/(loss) attributable to common shareholders | 798 | 712 | 12.1 | % | ||||||||||||||||
| Diluted EPS | $ | 0.67 | $ | 0.59 | 13.6 | % | ||||||||||||||
Adjusted EPS(1) | 0.58 | 0.62 | (6.5) | % | ||||||||||||||||
Adjusted Operating Income(1) | $ | 1,058 | $ | 1,199 | (11.8) | % | ||||||||||||||
Q1 2026 Financial Summary
•Net sales increased 0.8 percent versus the year-ago period to $6.0 billion, including a 1.9 percentage point favorable impact from foreign currency and a 0.7 percentage point unfavorable impact from divestitures. Organic Net Sales(1) decreased 0.4 percent versus the prior year period. Price increased 0.8 percentage points versus the prior year period, with increases in each segment. Favorable price was primarily due to pricing taken in certain categories to mitigate higher input costs. Volume/mix declined 1.2 percentage points versus the prior year period, with declines in each segment. Unfavorable volume/mix was primarily driven by declines in coffee, cold cuts, and Indonesia, which more than offset the favorable impact to certain categories as a result of the shift in Easter timing.
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•Operating Income decreased 4.3 percent versus the year-ago period to $1.1 billion, 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 were partially offset by favorable changes in unrealized losses/(gains) on commodity hedges, higher pricing, and certain nonrecurring procurement cost recoveries. Adjusted Operating Income(1) decreased 11.8 percent versus the year-ago period to $1.1 billion, 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 a favorable impact from foreign currency.
•Diluted EPS increased 13.6 percent versus the prior year period to $0.67. This increase was primarily due to lower income tax expense and favorable changes in other expense/(income), partially offset by the unfavorable changes in the operating income factors discussed above. Adjusted EPS(1) was $0.58, down 6.5 percent versus the prior year period, primarily driven by lower Adjusted Operating Income, which more than offset lower taxes on adjusted earnings.
•Net cash provided by/(used for) operating activities was $1.0 billion, up 39.7 percent versus the year-ago period. This increase was primarily driven by favorable changes in working capital, due, in part, to inventory optimization efforts and improved supplier payment terms, as well as favorable changes in collateral receipts related to our commodity derivative margin requirements. These impacts were partially offset by lower Adjusted Operating Income. Free Cash Flow(1) was $0.8 billion, up 58.9 percent versus the prior year period, driven by the same net cash provided by/(used for) operating activities discussed above.
•Capital Return: In the first quarter, the Company has paid $474 million in cash dividends. The Company did not repurchase any shares under its publicly announced share repurchase program. As of March 28, 2026, the Company has remaining authorization to repurchase approximately $1.5 billion of common stock under the publicly announced share repurchase program.
Outlook
For fiscal year 2026, the Company is reaffirming its outlook. The Company continues to expect:
•Organic Net Sales(1)(2) down 1.5 percent to down 3.5 percent versus the prior year. This includes an approximate 100 basis point impact from incremental SNAP headwinds.
•Constant Currency Adjusted Operating Income(1)(2) down 14 percent to down 18 percent versus the prior year. This includes incremental investments of approximately $600 million across marketing, sales, and R&D, as well as product superiority and price. It also includes the impact of lapping lower variable compensation in 2025, which is an approximate 300 basis point headwind. This contemplates an Adjusted Gross Profit Margin(1)(2) that is expected to be down 25 basis points to down 75 basis points versus the prior year.
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•Adjusted EPS(1)(2) in the range of $1.98 to $2.10. The Company now expects an effective tax rate on Adjusted EPS to be approximately 25 percent. Additionally, the Company now expects interest expense to be approximately $920 million and other expense/(income) to be approximately $200 million of income for the full year.
•Free Cash Flow Conversion(1)(2) of approximately 100 percent.
End Notes
(1)Organic Net Sales, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Operating Income, Constant Currency Adjusted Operating Income, Adjusted EBITDA, Adjusted EPS, Free Cash Flow, Free Cash Flow Conversion, and Net Leverage are non-GAAP financial measures. Please see discussion of non-GAAP financial measures and the reconciliations at the end of this press release for more information.
(2)Guidance for Organic Net Sales, Adjusted Gross Profit Margin, Constant Currency Adjusted Operating Income, Adjusted EPS, Free Cash Flow, and Free Cash Flow Conversion is provided on a non-GAAP basis only because certain information necessary to calculate the most comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of such items impacting comparability, including, but not limited to, the impact of currency, acquisitions and divestitures, divestiture-related license income, restructuring activities, deal costs, separation costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, equity award compensation expense, nonmonetary currency devaluation, and debt prepayment and extinguishment (benefit)/costs, among other items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, the Company is unable to provide a reconciliation of these measures without unreasonable effort.
Earnings Discussion and Webcast Information
A pre-recorded management discussion of The Kraft Heinz Company's first quarter 2026 earnings is available at ir.kraftheinzcompany.com. The Company will host a live question-and-answer session beginning today at 9:00 a.m. Eastern Daylight Time. A webcast of the session will be accessible at ir.kraftheinzcompany.com.
ABOUT THE KRAFT HEINZ COMPANY
Kraft Heinz (Nasdaq: KHC) is one of the world’s largest food and beverage companies, with approximately $25 billion in net sales in 2025 and a portfolio of iconic brands enjoyed by consumers in more than 40 countries. By investing in our capabilities and brands, including Heinz, Kraft, Philadelphia, Primal Kitchen, and Lunchables, we are unlocking the full power of our portfolio. We deliver high-quality, great-tasting, and affordable food for the consumers of today, while shaping the future of food. Learn more at www.kraftheinzcompany.com.
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Forward-Looking Statements
This press release contains a number of forward-looking statements. Words such as “accelerate,” “anticipate,” “believe,” “commit,” “continue,” “expect,” “will,” “guidance,” and “outlook,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding the Company's plans, impacts of accounting standards and guidance, growth, legal matters, taxes, costs and cost savings, impairments, dividends, expectations, investments, innovations, opportunities, capabilities, execution, initiatives, and pipeline. These forward-looking statements reflect management's current expectations and are not guarantees of future performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond the Company's control.
Important factors that may affect the Company's business and operations and that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, operating in a highly competitive industry; the Company’s ability to correctly predict, identify, and interpret changes in consumer preferences and demand, to offer new products to meet those changes, and to respond to competitive innovation; changes in the retail landscape or the loss of key retail customers; changes in the Company's relationships with significant customers or suppliers, or in other business relationships; the Company’s ability to maintain, extend, and expand its reputation and brand image; the Company’s ability to effect the previously announced separation of Kraft Heinz into two independent publicly traded companies and to meet the conditions related thereto, including obtaining applicable regulatory approvals, if work related to the separation is resumed; negative effects of the announcement pendency of the separation, including the current pause on work related to the separation, on the market price of the Company’s securities and/or on the Company’s financial performance; the Company’s ability to leverage its brand value to compete against private label products; the Company’s ability to drive revenue growth in its key product categories or platforms, increase its market share, or add products that are in faster-growing and more profitable categories; product recalls or other product liability claims; climate change and legal or regulatory responses; the Company’s ability to identify, complete, or realize the benefits from strategic acquisitions, divestitures, alliances, joint ventures, or investments; the Company's ability to successfully execute its strategic initiatives; the impacts of the Company's international operations; the Company's ability to protect intellectual property rights; the Company’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve its competitiveness; the influence of the Company's largest stockholder; the Company's level of indebtedness, as well as our ability to comply with covenants under our debt instruments; additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets; foreign exchange rate fluctuations; volatility in commodity, energy, and other input costs; volatility in the market value of all or a portion of the commodity derivatives we use; compliance with laws and regulations and related legal claims or regulatory enforcement actions; failure to maintain an effective system of internal controls; a downgrade in the Company's credit rating; the impact of sales of the Company's common stock in the public market; the impact of the Company’s share repurchases or any change in the Company’s share repurchase activity; the Company’s ability to continue to pay a regular dividend and the amounts of any such dividends; disruptions in the global economy caused by geopolitical conflicts (including the ongoing conflicts in the Middle East), unanticipated business disruptions and natural events in the locations in which the Company or the Company's customers, suppliers, distributors, or regulators operate; economic and political conditions in the United States and in various other nations where the Company does business (including inflationary pressures, the imposition
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of increased or new tariffs, instability in financial institutions, general economic slowdown, recession, or a potential U.S. federal government shutdown); changes in the Company's management team or other key personnel and the Company's ability to hire or retain key personnel or a highly skilled and diverse global workforce; our dependence on information technology and systems, including service interruptions, misappropriation of data, or breaches of security; increased pension, labor, and people-related expenses; changes in tax laws and interpretations and the final determination of tax audits, including transfer pricing matters, and any related litigation; volatility of capital markets and other macroeconomic factors; and other factors. For additional information on these and other factors that could affect the Company's forward-looking statements, see the Company's risk factors, as they may be amended from time to time, set forth in its filings with the Securities and Exchange Commission (“SEC”). The Company disclaims and does not undertake any obligation to update, revise, or withdraw any forward-looking statement in this press release, except as required by applicable law or regulation.
We use our investor relations website, ir.kraftheinzcompany.com, as a routine channel for distribution of important, and often material, information about Kraft Heinz, including quarterly and annual earnings results and presentations, press releases and other announcements, webcasts, analyst presentations, investor days, sustainability initiatives, financial information, and corporate governance practices, as well as archives of past presentations and events. We encourage you to follow our investor relations website in addition to our filings with the SEC to receive timely information about the Company. The information on our website is not part of this press release and shall not be deemed to be incorporated by reference into any filings we make with the SEC.
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Non-GAAP Financial Measures
The non-GAAP financial measures provided in this press release should be viewed in addition to, and not as an alternative for, results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
To supplement the financial information provided, the Company has presented Organic Net Sales, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Operating Income, Constant Currency Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income/(Loss), Adjusted EPS, Free Cash Flow, and Net Leverage which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable GAAP financial measures, such as net sales, net income/(loss), operating income/(loss), gross profit, diluted earnings per share (“EPS”), net cash provided by/(used for) operating activities, or other measures prescribed by GAAP, and there are limitations to using non-GAAP financial measures.
Management uses these non-GAAP financial measures to assist in comparing the Company’s 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 the Company’s underlying operations. The Company believes:
•Organic Net Sales, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Operating Income, Constant Currency Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income/(Loss), and Adjusted EPS provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis; and
•Free Cash Flow and Net Leverage provide measures of the Company’s core operating performance, the cash-generating capabilities of the Company’s business operations, and are factors used in determining the Company’s borrowing capacity and the amount of cash available for debt repayments, dividends, acquisitions, share repurchases, and other corporate purposes.
Management believes that presenting the Company’s non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting the Company’s business than could be obtained absent these disclosures.
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Definitions
Organic Net Sales is defined as net sales excluding, when they occur, the impact of currency, acquisitions and divestitures, and a 53rd week of shipments. The Company calculates the impact of currency on net sales by holding exchange rates constant at the previous year's exchange rate, with the exception of highly inflationary subsidiaries, for which the Company calculates the previous year's results using the current year's exchange rate.
Adjusted Operating Income is defined as operating income/(loss) excluding, when they occur, the impacts of restructuring activities, deal costs, separation costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters. The Company also presents Adjusted Operating Income on a constant currency basis (Constant Currency Adjusted Operating Income). The Company calculates the impact of currency on Adjusted Operating Income by holding exchange rates constant at the previous year's exchange rate, with the exception of highly inflationary subsidiaries, for which it calculates the previous year's results using the current year's exchange rate.
Adjusted Gross Profit, Adjusted Net Income/(Loss), and Adjusted EPS are defined as gross profit, net income/(loss), and diluted earnings per share, respectively, excluding, when they occur, the impacts of restructuring activities, deal costs, separation costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, losses/(gains) on the sale of a business, other losses/(gains) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), debt prepayment and extinguishment (benefit)/costs, and certain significant discrete income tax items (e.g., U.S. and non-U.S. tax reform), and including when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis. Adjusted Gross Profit Margin is defined as Adjusted Gross Profit divided by net sales.
Net Leverage is defined as debt less cash, cash equivalents and short-term investments divided by Adjusted EBITDA. Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/(income), provision for/(benefit from) income taxes, and depreciation and amortization (excluding restructuring activities); in addition to these adjustments, the Company excludes, when they occur, the impacts of divestiture-related license income, restructuring activities, deal costs, separation costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, and equity award compensation expense (excluding restructuring activities).
Free Cash Flow is defined as net cash provided by/(used for) operating activities less capital expenditures. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure.
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| |||||||||||
| Schedule 1 | |||||||||||
| The Kraft Heinz Company Condensed Consolidated Statements of Income (in millions, except per share data) (Unaudited) | |||||||||||
| For the Three Months Ended | |||||||||||
| March 28, 2026 | March 29, 2025 | ||||||||||
| Net sales | $ | 6,047 | $ | 5,999 | |||||||
| Cost of products sold | 3,828 | 3,935 | |||||||||
| Gross profit | 2,219 | 2,064 | |||||||||
| Selling, general and administrative expenses, excluding impairment losses | 1,061 | 868 | |||||||||
| Intangible asset impairment losses | 13 | — | |||||||||
| Selling, general and administrative expenses | 1,074 | 868 | |||||||||
| Operating income/(loss) | 1,145 | 1,196 | |||||||||
| Interest expense | 236 | 229 | |||||||||
| Other expense/(income) | (101) | (51) | |||||||||
| Income/(loss) before income taxes | 1,010 | 1,018 | |||||||||
| Provision for/(benefit from) income taxes | 211 | 304 | |||||||||
| Net income/(loss) | 799 | 714 | |||||||||
| Net income/(loss) attributable to noncontrolling interest | 1 | 2 | |||||||||
| Net income/(loss) attributable to common shareholders | $ | 798 | $ | 712 | |||||||
| Basic shares outstanding | 1,185 | 1,194 | |||||||||
| Diluted shares outstanding | 1,188 | 1,198 | |||||||||
| Per share data applicable to common shareholders: | |||||||||||
| Basic earnings/(loss) per share | $ | 0.67 | $ | 0.60 | |||||||
| Diluted earnings/(loss) per share | 0.67 | 0.59 | |||||||||
9
| |||||||||||||||||||||||||||||||||||
| Schedule 2 | |||||||||||||||||||||||||||||||||||
The Kraft Heinz Company Reconciliation of Net Sales to Organic Net Sales For the Three Months Ended (dollars in millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
| Net Sales | Currency | Acquisitions and Divestitures | Organic Net Sales | Price | Volume/Mix | ||||||||||||||||||||||||||||||
| March 28, 2026 | |||||||||||||||||||||||||||||||||||
| North America | $ | 4,458 | $ | 20 | $ | — | $ | 4,438 | |||||||||||||||||||||||||||
| International Developed Markets | 843 | 64 | — | 779 | |||||||||||||||||||||||||||||||
| Emerging Markets | 746 | 44 | — | 702 | |||||||||||||||||||||||||||||||
| Kraft Heinz | $ | 6,047 | $ | 128 | $ | — | $ | 5,919 | |||||||||||||||||||||||||||
| March 29, 2025 | |||||||||||||||||||||||||||||||||||
| North America | $ | 4,488 | $ | — | $ | — | $ | 4,488 | |||||||||||||||||||||||||||
| International Developed Markets | 817 | — | 37 | 780 | |||||||||||||||||||||||||||||||
| Emerging Markets | 694 | 18 | — | 676 | |||||||||||||||||||||||||||||||
| Kraft Heinz | $ | 5,999 | $ | 18 | $ | 37 | $ | 5,944 | |||||||||||||||||||||||||||
| Year-over-year growth rates | |||||||||||||||||||||||||||||||||||
| North America | (0.7) | % | 0.4 pp | 0.0 pp | (1.1) | % | 0.4 pp | (1.5) pp | |||||||||||||||||||||||||||
| International Developed Markets | 3.2 | % | 7.9 pp | (4.6) pp | (0.1) | % | 0.2 pp | (0.3) pp | |||||||||||||||||||||||||||
| Emerging Markets | 7.6 | % | 3.8 pp | 0.0 pp | 3.8 | % | 4.4 pp | (0.6) pp | |||||||||||||||||||||||||||
| Kraft Heinz | 0.8 | % | 1.9 pp | (0.7) pp | (0.4) | % | 0.8 pp | (1.2) pp | |||||||||||||||||||||||||||
10
| |||||||||||
| Schedule 3 | |||||||||||
The Kraft Heinz Company Reconciliation of Operating Income/(Loss) to Adjusted Operating Income (dollars in millions) (Unaudited) | |||||||||||
| For the Three Months Ended | |||||||||||
| March 28, 2026 | March 29, 2025 | ||||||||||
| Operating income/(loss) | $ | 1,145 | $ | 1,196 | |||||||
| Restructuring activities | 22 | 4 | |||||||||
| Unrealized losses/(gains) on commodity hedges | (178) | (1) | |||||||||
| Impairment losses | 13 | — | |||||||||
| Separation costs | 56 | — | |||||||||
| Adjusted Operating Income | $ | 1,058 | $ | 1,199 | |||||||
Segment Adjusted Operating Income: | |||||||||||
| North America | $ | 974 | $ | 1,101 | |||||||
International Developed Markets | 133 | 127 | |||||||||
| Total Segment Adjusted Operating Income | 1,107 | 1,228 | |||||||||
Emerging Markets Segment Adjusted Operating Income(a) | 95 | 99 | |||||||||
| General corporate expenses | (144) | (128) | |||||||||
Adjusted Operating Income | $ | 1,058 | $ | 1,199 | |||||||
(a) Segment Adjusted Operating Income for Emerging Markets, which represents the combination of our WEEM and AEM operating segments, is defined and presented consistently with the Segment Adjusted Operating Income of our reportable segments - North America and International Developed Markets.
11
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| Schedule 4 | |||||||||||||||||
The Kraft Heinz Company Reconciliation of Adjusted Operating Income to Constant Currency Adjusted Operating Income For the Three Months Ended (dollars in millions) (Unaudited) | |||||||||||||||||
| Adjusted Operating Income | Currency | Constant Currency Adjusted Operating Income | |||||||||||||||
| March 28, 2026 | |||||||||||||||||
| North America | $ | 974 | $ | 4 | $ | 970 | |||||||||||
| International Developed Markets | 133 | 9 | 124 | ||||||||||||||
| Emerging Markets | 95 | 5 | 90 | ||||||||||||||
| General corporate expenses | (144) | (5) | (139) | ||||||||||||||
| Kraft Heinz | $ | 1,058 | $ | 13 | $ | 1,045 | |||||||||||
| March 29, 2025 | |||||||||||||||||
| North America | $ | 1,101 | $ | — | $ | 1,101 | |||||||||||
| International Developed Markets | 127 | — | 127 | ||||||||||||||
| Emerging Markets | 99 | 4 | 95 | ||||||||||||||
| General corporate expenses | (128) | — | (128) | ||||||||||||||
| Kraft Heinz | $ | 1,199 | $ | 4 | $ | 1,195 | |||||||||||
| Year-over-year growth rates | |||||||||||||||||
| North America | (11.6) | % | 0.3 pp | (11.9) | % | ||||||||||||
| International Developed Markets | 4.9 | % | 7.0 pp | (2.1) | % | ||||||||||||
| Emerging Markets | (4.0) | % | 0.8 pp | (4.8) | % | ||||||||||||
| General corporate expenses | 13.0 | % | 3.9 pp | 9.1 | % | ||||||||||||
| Kraft Heinz | (11.8) | % | 0.7 pp | (12.5) | % | ||||||||||||
12
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| Schedule 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Kraft Heinz Company Reconciliation of GAAP Results to Non-GAAP Results (dollars in millions) (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 28, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross profit | Selling, general and administrative expenses | Operating income/(loss) | Interest expense | Other expense/(income) | Income/(loss) before income taxes | Provision for/(benefit from) income taxes | Net income/(loss) | Net income/(loss) attributable to noncontrolling interest | Net income/(loss) attributable to common shareholders | Diluted EPS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP Results | $ | 2,219 | $ | 1,074 | $ | 1,145 | $ | 236 | $ | (101) | $ | 1,010 | $ | 211 | $ | 799 | $ | 1 | $ | 798 | $ | 0.67 | |||||||||||||||||||||||||||||||||||||||||||
| Items Affecting Comparability | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring activities | 23 | 1 | 22 | — | 45 | (23) | (5) | (18) | — | (18) | (0.02) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized losses/(gains) on commodity hedges | (178) | — | (178) | — | — | (178) | (44) | (134) | — | (134) | (0.11) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment losses | — | (13) | 13 | — | — | 13 | — | 13 | — | 13 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Separation costs | — | (56) | 56 | — | — | 56 | 11 | 45 | — | 45 | 0.04 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Losses/(gains) on sale of business | — | — | — | — | 3 | (3) | 26 | (29) | — | (29) | (0.02) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonmonetary currency devaluation | — | — | — | — | (12) | 12 | — | 12 | — | 12 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Non-GAAP Results | $ | 2,064 | $ | 1,058 | $ | 688 | $ | 0.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13
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| Schedule 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Kraft Heinz Company Reconciliation of GAAP Results to Non-GAAP Results (dollars in millions) (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 29, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross profit | Selling, general and administrative expenses | Operating income/(loss) | Interest expense | Other expense/(income) | Income/(loss) before income taxes | Provision for/(benefit from) income taxes | Net income/(loss) | Net income/(loss) attributable to noncontrolling interest | Net income/(loss) attributable to common shareholders | Diluted EPS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP Results | $ | 2,064 | $ | 868 | $ | 1,196 | $ | 229 | $ | (51) | $ | 1,018 | $ | 304 | $ | 714 | $ | 2 | $ | 712 | $ | 0.59 | |||||||||||||||||||||||||||||||||||||||||||
| Items Affecting Comparability | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring activities | (2) | (6) | 4 | — | — | 4 | 1 | 3 | — | 3 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized losses/(gains) on commodity hedges | (1) | — | (1) | — | — | (1) | — | (1) | — | (1) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonmonetary currency devaluation | — | — | — | — | (14) | 14 | — | 14 | — | 14 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Certain significant discrete income tax items | — | — | — | — | — | — | (13) | 13 | — | 13 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Non-GAAP Results | $ | 2,061 | $ | 1,199 | $ | 743 | $ | 0.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14
| |||||||||||
| Schedule 7 | |||||||||||
| The Kraft Heinz Company Adjusted Gross Profit Margin (dollars in millions) (Unaudited) | |||||||||||
| For the Three Months Ended | |||||||||||
| March 28, 2026 | March 29, 2025 | ||||||||||
| Adjusted Gross Profit | $ | 2,064 | $ | 2,061 | |||||||
| Net sales | 6,047 | 5,999 | |||||||||
| Adjusted Gross Profit Margin | 34.1 | % | 34.4 | % | |||||||
15
| |||||||||||||||||
| Schedule 8 | |||||||||||||||||
| The Kraft Heinz Company Key Drivers of Change in Adjusted EPS (Unaudited) | |||||||||||||||||
| For the Three Months Ended | |||||||||||||||||
| March 28, 2026 | March 29, 2025 | $ Change | |||||||||||||||
| Key drivers of change in Adjusted EPS: | |||||||||||||||||
Results of operations(a)(b) | $ | 0.63 | $ | 0.72 | $ | (0.09) | |||||||||||
| Interest expense | (0.14) | (0.14) | — | ||||||||||||||
| Other expense/(income) | 0.04 | 0.04 | — | ||||||||||||||
| Effective tax rate | 0.05 | — | 0.05 | ||||||||||||||
| Adjusted EPS | $ | 0.58 | $ | 0.62 | $ | (0.04) | |||||||||||
(a) Includes non-cash amortization of definite-lived intangible assets, which accounted for a negative impact to Adjusted EPS from results of operations of $0.04 for the three months ended March 28, 2026 and March 29, 2025.
(b) Includes divestiture-related license income, which accounted for a benefit to Adjusted EPS from results of operations of $0.01 for the three months ended March 28, 2026 and March 29, 2025.
16
| |||||||||||
| Schedule 9 | |||||||||||
| The Kraft Heinz Company Condensed Consolidated Balance Sheets (in millions, except per share data) (Unaudited) | |||||||||||
| March 28, 2026 | December 27, 2025 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 3,308 | $ | 2,615 | |||||||
| Trade receivables, net | 2,306 | 2,254 | |||||||||
| Inventories | 3,310 | 3,167 | |||||||||
| Prepaid expenses | 270 | 291 | |||||||||
| Marketable securities | 783 | 1,060 | |||||||||
| Other current assets | 704 | 588 | |||||||||
| Assets held for sale | — | 152 | |||||||||
| Total current assets | 10,681 | 10,127 | |||||||||
| Property, plant and equipment, net | 7,233 | 7,318 | |||||||||
| Goodwill | 22,153 | 22,179 | |||||||||
| Intangible assets, net | 37,387 | 37,529 | |||||||||
| Other non-current assets | 4,592 | 4,633 | |||||||||
| TOTAL ASSETS | $ | 82,046 | $ | 81,786 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current portion of long-term debt | $ | 1,910 | $ | 1,908 | |||||||
| Accounts payable | 4,390 | 4,308 | |||||||||
| Accrued marketing | 936 | 801 | |||||||||
| Interest payable | 294 | 298 | |||||||||
| Other current liabilities | 1,408 | 1,455 | |||||||||
| Liabilities held for sale | — | 8 | |||||||||
| Total current liabilities | 8,938 | 8,778 | |||||||||
| Long-term debt | 19,223 | 19,311 | |||||||||
| Deferred income taxes | 9,050 | 9,022 | |||||||||
| Accrued postemployment costs | 131 | 131 | |||||||||
| Long-term deferred income | 1,308 | 1,321 | |||||||||
| Other non-current liabilities | 1,347 | 1,434 | |||||||||
| TOTAL LIABILITIES | 39,997 | 39,997 | |||||||||
| Redeemable noncontrolling interest | 13 | 12 | |||||||||
| Equity: | |||||||||||
| Common stock, $0.01 par value | 12 | 12 | |||||||||
| Additional paid-in capital | 50,838 | 51,287 | |||||||||
| Retained earnings/(deficit) | (3,831) | (4,629) | |||||||||
| Accumulated other comprehensive income/(losses) | (2,448) | (2,370) | |||||||||
| Treasury stock, at cost | (2,648) | (2,636) | |||||||||
| Total shareholders' equity | 41,923 | 41,664 | |||||||||
| Noncontrolling interest | 113 | 113 | |||||||||
| TOTAL EQUITY | 42,036 | 41,777 | |||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 82,046 | $ | 81,786 | |||||||
17
| |||||||||||
| Schedule 10 | |||||||||||
| The Kraft Heinz Company Condensed Consolidated Statements of Cash Flows (in millions) (Unaudited) | |||||||||||
| For the Three Months Ended | |||||||||||
| March 28, 2026 | March 29, 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income/(loss) | $ | 799 | $ | 714 | |||||||
| Adjustments to reconcile net income/(loss) to operating cash flows: | |||||||||||
| Depreciation and amortization | 245 | 231 | |||||||||
| Divestiture-related license income | (13) | (13) | |||||||||
| Equity award compensation expense | 22 | 27 | |||||||||
| Deferred income tax provision/(benefit) | 29 | 51 | |||||||||
| Postemployment benefit plan contributions | (4) | (4) | |||||||||
| Goodwill and intangible asset impairment losses | 13 | — | |||||||||
| Nonmonetary currency devaluation | 12 | 14 | |||||||||
| Loss/(gain) on sale of business | (3) | — | |||||||||
| Other items, net | (227) | (14) | |||||||||
| Changes in current assets and liabilities: | |||||||||||
| Trade receivables | (73) | (89) | |||||||||
| Inventories | (195) | (217) | |||||||||
| Accounts payable | 256 | (11) | |||||||||
| Other current assets | 3 | (47) | |||||||||
| Other current liabilities | 142 | 78 | |||||||||
| Net cash provided by/(used for) operating activities | 1,006 | 720 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | (240) | (238) | |||||||||
| Purchases of marketable securities | (105) | (673) | |||||||||
Proceeds from sale of marketable securities | 387 | — | |||||||||
| Proceeds from sale of business, net of cash disposed and working capital adjustments | 146 | 9 | |||||||||
| Other investing activities, net | (3) | 24 | |||||||||
| Net cash provided by/(used for) investing activities | 185 | (878) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from issuance of long-term debt | — | 1,620 | |||||||||
| Dividends paid | (474) | (477) | |||||||||
| Repurchases of common stock | (23) | (225) | |||||||||
| Other financing activities, net | (15) | (18) | |||||||||
| Net cash provided by/(used for) financing activities | (512) | 900 | |||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (7) | 35 | |||||||||
| Cash, cash equivalents, and restricted cash | |||||||||||
| Net increase/(decrease) | 672 | 777 | |||||||||
| Balance at beginning of period | 2,944 | 1,486 | |||||||||
| Balance at end of period | $ | 3,616 | $ | 2,263 | |||||||
18
| |||||||||||
| Schedule 11 | |||||||||||
| The Kraft Heinz Company Reconciliation of Net Cash Provided By/(Used For) Operating Activities to Free Cash Flow (in millions) (Unaudited) | |||||||||||
| For the Three Months Ended | |||||||||||
| March 28, 2026 | March 29, 2025 | ||||||||||
| Net cash provided by/(used for) operating activities | $ | 1,006 | $ | 720 | |||||||
| Capital expenditures | (240) | (238) | |||||||||
| Free Cash Flow | $ | 766 | $ | 482 | |||||||
| | |||||||||||
| Adjusted Net Income/(Loss) | $ | 688 | $ | 743 | |||||||
| Free Cash Flow Conversion | 111 | % | 65 | % | |||||||
19
FAQ
How did Kraft Heinz (KHC) perform in Q1 2026 on a sales and earnings basis?
Kraft Heinz Q1 2026 net sales rose 0.8% to $6.047 billion, while Organic Net Sales fell 0.4%. Operating income declined 4.3% to $1.145 billion, net income increased 11.9% to $799 million, diluted EPS grew to $0.67, and Adjusted EPS decreased 6.5% to $0.58.
What were Kraft Heinz (KHC) key margin trends in the first quarter of 2026?
Gross profit margin improved, but adjusted margins softened slightly. Reported gross profit margin increased 230 basis points to 36.7%, reflecting lower cost of products sold. Adjusted Gross Profit Margin declined 30 basis points to 34.1%, showing that underlying profitability faced pressure despite headline margin gains.
How strong was Kraft Heinz (KHC) cash flow and Free Cash Flow in Q1 2026?
Kraft Heinz generated significantly higher cash in Q1 2026. Net cash from operating activities was $1.006 billion, up 39.7% year over year. Free Cash Flow reached $766 million, rising 58.9%, and Free Cash Flow Conversion improved to 111%, supported by working capital and derivative collateral movements.
What is Kraft Heinz (KHC) outlook for full-year 2026 Organic Net Sales and earnings?
The company reaffirmed a cautious 2026 outlook with lower organic revenue and earnings. Management expects Organic Net Sales down 1.5%–3.5%, Constant Currency Adjusted Operating Income down 14%–18%, Adjusted EPS between $1.98 and $2.10, and Free Cash Flow Conversion of about 100%.
What drove the divergence between Kraft Heinz GAAP EPS and Adjusted EPS in Q1 2026?
GAAP EPS rose while Adjusted EPS declined due to non-operating factors. Diluted EPS increased 13.6% to $0.67, helped by lower income tax expense and favorable other expense/income. Adjusted EPS fell 6.5% to $0.58, mainly reflecting lower Adjusted Operating Income despite lower taxes on adjusted earnings.