Kraft Heinz Company (NASDAQ: KHC) has reported its financial results for the second quarter of 2025, with net sales decreasing by 1.9% to $6.4 billion compared to the same period last year. Organic net sales also decreased by 2.0% over the same period. The company's gross profit margin decreased by 100 basis points to 34.4%, with adjusted gross profit margin also decreasing by 140 basis points to 34.1%.
Operating income saw a significant decline, reporting a loss of $8.0 billion, primarily driven by non-cash impairment losses of $9.3 billion. Adjusted operating income was $1.3 billion, down by 7.5% compared to the previous year.
Year-to-date net cash provided by operating activities was $1.9 billion, showing an increase of 12.6%. Free cash flow also increased by 28.5% to $1.5 billion, with free cash flow conversion increasing by 31 percentage points to 96%.
The return of capital to stockholders year-to-date was $1.4 billion, reflecting the company's commitment to providing value to its shareholders.
In terms of net sales, there was a 3.3% decrease in North America, a 1.3% increase in international developed markets, and a 4.2% increase in emerging markets. For the six months ended, there was a 5.2% decrease in North America, a 1.5% decrease in international developed markets, and a 0.4% decrease in emerging markets.
The company's diluted earnings per share (EPS) decreased by 8,350.0% to $(6.60), primarily due to non-cash impairment losses. Adjusted EPS was $0.69, down by 11.5% compared to the previous year, driven by lower adjusted operating income and higher taxes on adjusted earnings.
Kraft Heinz continues to maintain its full-year 2025 outlook, expecting organic net sales to be down 1.5% to 3.5% versus the prior year. The company also anticipates adjusted EPS in the range of $2.51 to $2.67 and free cash flow to be flat versus the prior year, with free cash flow conversion of at least 95%.
The company is reaffirming its commitment to driving long-term profitable growth, with a focus on delivering value and maintaining financial flexibility.
Kraft Heinz has also been evaluating potential strategic transactions to unlock long-term shareholder value, with a rigorous review of a broad range of options. The company is confident in its ability to drive momentum across its business and generate strong cash flow. The market has reacted to these announcements by moving the company's shares 1.1% to a price of $28.56. If you want to know more, read the company's complete 8-K report here.
