The Kraft Heinz Company (KHC) Q2 2026 [Q&A] earnings summary

Executive summary

• Management expressed confidence in business momentum, supported by incremental investments and a positive setup for 2027, particularly in the U.S. and emerging markets.

• Net sales for Q2 2026 were $6.3B, down 1.4% year-over-year; organic net sales declined 1.3%.

• Q2 2026 net loss was $5.5B, a 30% improvement from Q2 2025, driven by lower impairment charges.

• Strategic partnerships with Disney and the NFL, and new product launches, are expected to enhance consumer engagement and brand visibility.

• Incremental investments for 2026 increased by $100 million to $700 million, aimed at setting up stronger performance in 2027.

Financial highlights

• Q2 2026 Organic Net Sales: $6.2B, down 1.3% year-over-year; net sales for Q2 2026 were $6.3B, down 1.4%.

• Adjusted Operating Income for Q2 2026 was $1.0B, down 18.4% year-over-year.

• Adjusted EPS for Q2 2026 was $0.56, down 18.8% year-over-year.

• Free cash flow for the year-to-date rose 10.3% to $1.7B, with free cash flow conversion at 123%.

• $7.4B in non-cash impairment losses recorded in Q2 2026, mainly related to goodwill and intangible assets.

Outlook and guidance

• Fiscal 2026 organic net sales expected to decline 0.5% to 2.0% year-over-year, including a 100 basis point SNAP headwind.

• Constant currency adjusted operating income projected to decrease 16% to 18%.

• Adjusted EPS guidance: $2.03 to $2.09; free cash flow conversion expected at approximately 110%.

• Inflation for 2027 is expected in the 4%-5% range, but management is confident in offsetting this through productivity.

• Capital expenditures for 2026 are projected at $850M, focused on maintenance, technology, and growth investments.