01—Abstract
Summary
Summary of the 10-Q filed August 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Kraft Heinz reported a large second-quarter 2026 net loss driven by non-cash impairments.
For the three months ended June 27, 2026, net sales were $6.26 billiona versus $6.35 billion a year earlier, and operating loss was $6.43 billion, reflecting $2.44 billion of goodwill impairment losses and $4.91 billion of intangible asset impairment losses. Net loss attributable to common shareholders was $5.46 billion, or $(4.60) per diluted share, compared with $(6.60) a year earlier. Management's Adjusted Operating Income was $1.04 billion, down 18.4% from $1.28 billion, and Adjusted EPS was $0.56, down 18.8% from $0.69.
Organic Net Sales declined 1.3%b, with unfavorable volume/mix of 2.6 pp partly offset by higher pricing of 1.3 pp. The filing attributes the impairments to the market's perceived risk of achieving cash flow projections, and notes that updated expectations reflect increased marketing, sales and R&D investments. Several reporting units and brands were written down to zero excess fair value, and the company states that additional impairments are possible.
Goodwill fell to $19.71 billion and indefinite-lived intangible assets to $29.15 billionc from $34.17 billion at year-end 2025. Total equity declined to $36.12 billion from $41.78 billion. On the balance sheet and cash side, the company repaid $1.9 billion of senior notes maturing in June 2026, and completed a tender offer for $1.4 billion of its 2046 Notes, recognizing a $265 million gain on extinguishment of debt.
Total debt was $19.0 billiond at June 27, 2026 versus $21.2 billion at December 27, 2025. Operating cash flow was $2.09 billion for the six months, and the Board declared a $0.40 per share quarterly dividend payable September 25, 2026. The filing also states that work on the previously announced separation into two companies remains paused, and that the long-term debt ratings are BBB with a negative outlook from S&P and Fitch and Baa2 under review for downgrade from Moody's.
02—Key points
Key Highlights
- Second-quarter operating loss of $6.43 billion, driven by $2.44 billion of goodwill impairment losses and $4.91 billion of intangible asset impairment losses recorded in SG&A.
- Net loss attributable to common shareholders of $5.46 billion, or $(4.60) per diluted share, versus $(6.60) in the prior-year quarter.
- Adjusted Operating Income fell 18.4% to $1.04 billion, and Adjusted EPS fell 18.8% to $0.56, primarily on increased advertising expenses, unfavorable volume/mix and cost inflation.
- Organic Net Sales decreased 1.3% for the quarter; North America Organic Net Sales decreased 2.7%, while Emerging Markets Organic Net Sales increased 8.5%.
- Total debt fell to $19.0 billion from $21.2 billion after repaying $1.9 billion of June 2026 maturities and tendering $1.4 billion of 2046 Notes, which produced a $265 million gain on extinguishment.
- Several reporting units and brands, including Kraft, Oscar Mayer and Lunchables, were written down to zero excess fair value, and the company notes heightened risk of future impairments.
- The Board declared a $0.40 per share dividend payable September 25, 2026, while the previously announced separation remains paused.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2026, Kraft Heinz lost $0.87.
- Revenue$6.26B100.0%
- Cost of revenue−$4.23B67.6%
- Gross profit$2.03B32.4%
- Operating costs−$8.46B135.1%
- Operating income−$6.43B102.7%
- Interest, other & tax$971.0M15.5%
- Net income−$5.46B87.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 5, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $6.26B$6.35B | −1.4% |
| Cost of Revenue | $4.23B$4.17B | +1.6% |
| Gross Profit | $2.03B$2.18B | −7.1% |
| SG&A Expenses | $8.46B$10.16B | −16.7% |
| Operating Income | -$6.43B-$7.97B | +19.4% |
| Interest Expense | -$31.00M$240.00M | −112.9% |
| Net Income | -$5.46B-$7.82B | +30.2% |
| EPS (Basic) | $-4.60$-6.60 | +30.3% |
| EPS (Diluted) | $-4.60$-6.60 | +30.3% |
| Shares Outstanding (Basic) | 1.19B1.19B | +0.1% |
| Shares Outstanding (Diluted) | 1.19B1.19B | +0.1% |
05—Questions
Frequently Asked Questions
Why did Kraft Heinz report such a large net loss this quarter?
The loss was driven mainly by non-cash impairment charges. The company recorded $2.44 billion of goodwill impairment losses and $4.91 billion of intangible asset impairment losses in the second quarter of 2026. The filing states these followed a sustained decline in share price and market capitalization, which the company treated as a triggering event for interim impairment tests.
How did underlying operating performance compare with the prior year?
Adjusted Operating Income decreased 18.4% to $1.04 billion for the quarter, and Adjusted EPS decreased 18.8% to $0.56. Management attributed the decline to increased advertising expenses, unfavorable volume/mix, inflationary pressures in manufacturing and logistics costs that outpaced efficiency initiatives, and higher variable compensation, partly offset by higher pricing and procurement efficiencies.
How much debt did the company reduce, and how?
Long-term debt, including the current portion, was $19.0 billion at June 27, 2026, compared with $21.2 billion at December 27, 2025. The reduction reflects repayment of $1.9 billion of senior notes matured in June 2026 and the purchase of about $1.4 billion of 2046 Notes through a tender offer, partly offset by the issuance of 500 million euros each of 2031 and 2034 notes. In July 2026, the company also partially redeemed $1.0 billion of its 3.875% notes due 2027.
Is the dividend at risk, and what is the status of the separation?
The Board declared a $0.40 per share cash dividend payable September 25, 2026, and the filing notes that declarations remain at the Board's discretion. The separation of Kraft Heinz into two independent companies is paused; the filing states that its timing and completion are uncertain and that resumption would require customary conditions, including final Board approval and favorable tax opinions.
What risks does the filing flag for future results?
The filing flags possible further impairments, since brands and reporting units with 20% or less excess fair value have heightened risk. It also cites an IRS examination with proposed transfer pricing adjustments for 2018 to 2022, which the company says it is contesting, and states that ratings from Moody's are under review for downgrade. Inflation expected to increase in 2026 and the SNAP program changes are also cited as pressures on results.
06—Continue