Kraft Heinz Raises Low End of 2026 Sales Outlook

The Tip Desk · November 4, 2026 · 4 min read

The food company now expects full-year organic net sales down 0.5% to down 1.25% and Adjusted EPS of $2.07 to $2.13.

The Kraft Heinz Company (KHC) raised the low end of its 2026 organic net sales outlook after a third quarter in which reported sales fell faster than in the prior period, even as the company said its U.S. turnaround and international growth plan remained on track.

For the full year, Kraft Heinz now expects Organic Net Sales down 0.5% to down 1.25% versus the prior year, from a previous range of down 2% to down 0.5%. The company said the new range includes an approximate 100 basis point impact from incremental SNAP headwinds. Adjusted EPS is now expected at $2.07 to $2.13, up from $2.03 to $2.09. Constant Currency Adjusted Operating Income remains expected down 16% to down 18%. Adjusted Gross Profit Margin is now expected at the low end of the previously provided range of down 10 basis points to down 50 basis points.

Chief Executive Steve Cahillane said the company is raising the low end of the organic sales outlook “reflecting the momentum we have built.”

For the three months ended Sept. 26, 2026, net sales decreased 2.0% to $6.1 billion, a steeper decline than the 1.4% drop in the second quarter. Organic Net Sales decreased 1.1%, after a 1.3% organic decline in the second quarter. The company said the reported sales decline included a 0.3 percentage point unfavorable impact from foreign currency and a 0.6 percentage point unfavorable impact from divestitures.

Companywide organic price was flat, reversing a 1.3 percentage point organic price increase in the second quarter. Emerging Markets price of 7.2 percentage points offset negative price in North America and Europe and Pacific Developed Markets. Organic volume/mix declined 1.1 percentage points, after a 2.6 percentage point organic volume/mix decline in the second quarter. Kraft Heinz said the unfavorable volume/mix was primarily driven by declines in North America across meats, sauces, and refreshment beverages, in addition to an approximate 80 basis point headwind from inventory pull forward into the second quarter.

North America net sales fell 3.4% to $4.49 billion, a steeper drop than the 2.7% decline in the second quarter. Organic North America sales fell 3.2% on 0.8 percentage points of negative price and 2.4 percentage points of negative volume/mix. Europe and Pacific Developed Markets net sales fell 5.6% to $910 million, versus a 3.5% decline in the second quarter; organic sales fell 1.3%. Emerging Markets net sales rose 13.8% to $720 million, accelerating from a 10.4% increase in the second quarter; organic sales rose 15.6% on 7.2 percentage points of price and 8.4 percentage points of volume/mix.

Operating income decreased 14.6% to $0.9 billion. The company attributed the decline primarily to increased inflationary pressures in procurement and logistics costs, higher variable compensation expense, non-cash impairment losses that were $37 million higher in the current year period, unfavorable volume/mix, and increased advertising expenses. Those impacts more than offset efficiency initiatives and favorable changes in unrealized losses on commodity hedges. Adjusted Operating Income decreased 15.2% to $0.9 billion, after an 18.4% decline to $1.0 billion in the second quarter.

Gross profit margin increased 60 basis points to 32.5%, after a 200 basis point decline to 32.4% in the second quarter. Adjusted Gross Profit Margin decreased 40 basis points to 31.9%, after being flat at 34.1% in the second quarter.

Diluted EPS decreased 11.5% to $0.46. Adjusted EPS was $0.53, down 13.1%. Kraft Heinz said the adjusted decline was primarily driven by lower Adjusted Operating Income and unfavorable changes in other expense, partially offset by lower interest expense and lower taxes on adjusted earnings.

For the nine months ended Sept. 26, 2026, net cash provided by operating activities was $3.0 billion, down 4.1%. Free Cash Flow was $2.4 billion, down 5.2%. Free Cash Flow Conversion increased 11 percentage points to 120%. The company said the operating-cash decline was driven by lower Adjusted Operating Income, partially offset by favorable changes in working capital. Year-to-date return of capital to stockholders was $1.4 billion, all in cash dividends; the company did not repurchase shares.

The company said the 2026 outlook contemplates incremental investments of approximately $700 million compared with 2025 and an approximate 500 basis point headwind from lapping lower incentive compensation. It also expects an effective tax rate on Adjusted EPS of approximately 23.5%, interest expense of approximately $890 million, other income of approximately $210 million, and Free Cash Flow Conversion of approximately 110%.