A global food and beverage company behind beloved kitchen staples like Kraft mac and cheese, Heinz ketchup, Philadelphia cream cheese, Oscar Mayer meats, and Lunchables. It was born in 2015 when two century-old American food giants—H.J. Heinz (founded 1869) and Kraft (founded 1903)—merged. Fun fact: its Oscar Mayer Wienermobile has cruised American roads since 1936, driven by recent college grads known as "Hotdoggers."
Gross margin fell 4.3 points sequentially to 32.4% as cost inflation and a $6.4B non-cash impairment loss drove a $5.5B net loss.
A $6.4 billion charge pushed Kraft Heinz to a $5.5 billion quarterly net loss. fell 1.4% to $6.3 billion and dropped 2.0 points to 32.4% as manufacturing and logistics inflation and unfavorable outweighed higher pricing. The company is now operating with $17.6 billion in and $36.1 billion in after the latest of legacy brand values.
Key takeaways
A $6.4 billion non-cash and intangible asset loss drove to a loss of $6.4 billion and to a loss of $5.5 billion, the second large impairment-driven loss in four quarters.
fell 2.0 points to 32.4%, and 4.3 points sequentially from Q1's 36.7%, as manufacturing and logistics cost inflation and unfavorable more than offset a 1.3-point pricing benefit.
fell 18.4% to $1.0 billion, driven by increased advertising expenses, unfavorable , and cost inflation that outpaced efficiency initiatives.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net sales fell 1.4% to $6.3B; adjusted operating income dropped 18.4% on higher ad spend and cost inflation.
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Consolidated decreased 1.4% to $6.3 billion, with down 1.3% as unfavorable (2.6 pp) more than offset higher pricing (1.3 pp).
Consolidated fell 1.3%, with a 2.6-point decline in concentrated in meats, spreads, and cheese, partly offset by 1.3 points of higher pricing.
was the lone growth story, with up 8.5% on both higher pricing and favorable , and rising 6.7% to $107 million.
rose 7.6% sequentially to $1.1 billion, and the company repaid $1.9 billion in maturing senior notes while tendering for $1.4 billion of 2046 Notes, bringing down to $17.6 billion.
What changed
The 36.7% achieved in Q1 2026—flagged as a sustainability question—did not hold, falling 4.3 points to 32.4% as manufacturing and logistics inflation accelerated, partly due to the Iran conflict cited by management.
The decline widened to 2.6 points from 1.2 points in Q1 2026, reversing the narrowing trend that had been flagged as a key watch item, with weakness spreading across meats, spreads, and cheese.
A new $6.4 billion charge materialized, following the $9.3 billion taken in Q2 2025, confirming that the remaining $37.2 billion in reporting units and brands flagged at heightened risk continues to face fair-value pressure.
The paused separation into two public companies remained on hold, with $66 million in year-to-date separation costs incurred, while management now expects inflationary pressures to increase through 2026.
What to watch
Q3 2026 trajectory to see whether the 32.4% level represents a new floor or if cost inflation tied to the Iran conflict drives it lower, particularly as the 1.3-point pricing benefit may not keep pace.
Whether the 2.6-point decline narrows or widens in Q3 2026, especially in where meats, spreads, and cheese drove the Q2 weakness.
Any further charges on the remaining and , given that a second large in four quarters signals continued deterioration in legacy brand valuations.
Whether the board approves resumption of the paused separation into two public companies, and if so, the terms of any related refinancing and the tax-free status of the transaction.
fell 18.4% to $1.0 billion, driven by increased advertising expenses, unfavorable , and manufacturing and logistics cost inflation that outpaced efficiency initiatives.
declined 2.7% on unfavorable in meats, spreads, and cheese, while Segment fell 15.8% to $988 million.
grew 8.5%, with both higher pricing (4.5 pp) and favorable (4.0 pp), and Segment rose 6.7% to $107 million.
Net cash provided by operating activities was $2.1 billion for the first half, up from $1.9 billion, helped by improved ; the company repaid $1.9 billion in maturing senior notes and tendered for $1.4 billion of 2046 Notes.
The company paused its planned separation into two public companies, incurring $66 million in separation costs year-to-date, and expects inflationary pressures to increase through 2026 partly due to the Iran conflict.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our market risk during the six months ended June 27, 2026. For additional information, refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, in our Annual Report on Form 10-K for the year ended December 27, 2025.
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There have been no material changes to our market risk during the six months ended June 27, 2026. For additional information, refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, in our Annual Report on Form 10-K for the year ended December 27, 2025.