Kraft Heinz (KHC) reported net income of $536 million in the third quarter of 2026, down 12.6% from $613 million in the same period last year. Earnings per share (EPS) were $0.46, compared with $0.52 in 3Q25. Net sales totaled $6.1 billion ($6,115 million), a decline of 2.0%.
Organic net sales (non-GAAP, excludes currency and divestitures) fell 1.1%. Pricing was flat, while volume and mix declined 1.1 percentage points, with declines in North America in meats, sauces and beverages. Emerging Markets grew 15.6% in organic sales. The company also cited an impact of about 80 basis points from inventory pull-forward into the second quarter.
Operating income was $875 million, down 14.6%, due to inflation in procurement and logistics, higher incentive compensation, $37 million higher impairment losses (accounting write-downs), weaker volume/mix and increased advertising spending. Adjusted operating income (non-GAAP, excludes items the company considers non-recurring) was $939 million, down 15.2%. Adjusted EPS was $0.53, compared with $0.61. Gross margin was 32.5%, and adjusted gross margin was 31.9%.
For the nine months, there was a net loss of $4.1 billion ($4,125 million), with EPS of $(3.47), compared with a loss of $6.5 billion a year earlier. The result includes impairments of $7.4 billion. Adjusted EPS was $1.67. Free cash flow (non-GAAP) was $2.4 billion, down 5.2%. The company paid $1.4 billion in dividends for the year and made no repurchases under the announced program.
For 2026, the company projects adjusted EPS of $2.07 to $2.13, compared with $2.03 to $2.09 previously. Organic net sales are expected to decline between 0.5% and 1.25%, with the low end of the range raised (previously, a decline of up to 2%). Adjusted operating income in constant currency is expected to fall 16% to 18%, and free cash flow conversion is expected to be about 110%.
