Kraft Heinz Company (KHC) Q2 2025 Financial Results Summary

# Kraft Heinz (KHC) Q2 2025 Financial Results Summary

The Kraft Heinz Company (Nasdaq: KHC) released its financial results for the second quarter of 2025 on July 30, 2025. Below is a summary of the key financial metrics and performance indicators for the quarter.

### Financial Highlights

– **Net Sales**:
– Total net sales decreased **1.9%** year-over-year to **$6.35 billion**.
– Organic net sales decreased by **2.0%** compared to the same period last year.

– **Segment Performance**:
– **North America**:
– Sales decreased **3.3%** to **$4.76 billion**.
– **International Developed Markets**:
– Sales increased by **1.3%** to **$897 million**.
– **Emerging Markets**:
– Saw a sales increase of **4.2%**, totaling **$698 million**.

– **Profitability**:
– **Gross Profit Margin** dropped **100 basis points** to **34.4%**. Adjusted Gross Profit Margin was down **140 basis points** to **34.1%**.
– **Operating Income** recorded a loss of **$8.0 billion**, a decline of **1,627.6%** year-over-year, primarily due to non-cash impairment losses of **$9.3 billion**.
– **Adjusted Operating Income** decreased by **7.5%** to **$1.3 billion**.

– **Net Income and Earnings Per Share (EPS)**:
– **Net Income** loss of **$7.82 billion**, a dramatic decrease of **7,923%** compared to last year.
– **Diluted EPS** dropped to **$(6.60)**, down **8,350%** from **$0.08** in the same quarter of the previous year.
– Adjusted EPS came at **$0.69**, down **11.5%** compared to **$0.78** in Q2 2024.

– **Cash Flow**:
– Cash provided by operating activities was **$1.9 billion**, up **12.6%** compared to the previous year.
– Free Cash Flow rose by **28.5%** to **$1.5 billion**.

– **Return of Capital to Shareholders**:
– Total capital returned to shareholders was **$1.4 billion** year-to-date.
– Cash dividends paid amounted to **$951 million**.
– Share repurchases totaled **$435 million**; approximately **$400 million** of this was under the publicly announced share repurchase program.

### Year-to-Date Performance

– **Net Cash Provided by Operating Activities**:
– **$1.9 billion** (up **12.6%**).

– **Free Cash Flow**:
– **$1.5 billion** (up **28.5%**), converting at **96%**, an increase of **31 percentage points** compared to the previous year.

### Strategic Outlook

– Kraft Heinz is maintaining its full-year outlook for 2025:
– Expecting Organic Net Sales to decline between **1.5% and 3.5%** year-on-year.
– Adjusted Operating Income anticipated to drop between **5% to 10%**.
– Expected Adjusted EPS in the range of **$2.51 to $2.67**.
– Free Cash Flow expected to remain flat compared to the prior year, with conversion of at least **95%**.

### Summary

Kraft Heinz has faced significant challenges in the second quarter of 2025, notably reflected in its operating income and net income losses due to large impairment charges. However, the company has shown improvements in cash flow metrics and remains committed to returning capital to shareholders while pursuing strategic growth opportunities.

### The Kraft Heinz Company
#### Condensed Consolidated Statements of Income
(in millions, except per share data)
For the Three Months Ended For the Six Months Ended
(Unaudited)

### The Kraft Heinz Company
#### Condensed Consolidated Balance Sheets
(in millions, except per share data)
(Unaudited)