AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat25
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Protected trademarks provide differentiation, but their asserted value and market positioning do not demonstrate a durable barrier against price competition. Actual pricing restrictions weaken the structural case.
durability · 1/4 · Platform sales declined over 2023–2025 and first-half 2026 North American volume/mix remained unfavorable. Legal brand protection has not demonstrated durable demand protection.
customer dependency · 1/4 · Continued substantial sales indicate ongoing demand, but unfavorable volume/mix and private-label pricing pressure suggest weak dependency. This is an indirect operating assessment; switching friction and retention rates are undisclosed.
erosion resilience · 1/4 · Pricing and procurement efficiencies did not offset unfavorable volume/mix, manufacturing and logistics inflation, and increased expenses in North America's second quarter. First-half consolidated gross profit was stable, providing a limited counterweight.
Pricing power31
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · North America realized 0.7 percentage points of higher pricing in first-half 2026, but unfavorable volume/mix outweighed it. The company also discloses actual restrictions on raising and maintaining prices, making the outcome mixed.
retention · 1/4 · Multi-year platform sales declines and unfavorable first-half North American volume/mix indicate fragile repeat demand. These are indirect retention signals, not customer-level measurements, and do not isolate pricing elasticity.
margin resilience · 1/4 · First-half consolidated gross profit held steady, but second-quarter gross profit declined and North American adjusted operating income fell 15.8%. Pricing and procurement savings provided incomplete protection against costs and demand weakness.
contractual freedom · 1/4 · The company can implement some price increases, but explicitly reports restrictions on increasing and maintaining them. This supports weak practical pricing freedom; detailed customer contract provisions are absent.
Predictability86
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 2.23
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.79
Financial strength16
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 31.49
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 0.00
- currentRatioGrade
- 32.29
- Debt / FCF (x)
- 5.80
- Interest coverage (x)
- -4.93
- Current ratio (x)
- 1.15
Capital allocation51
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 0.63
- 3-year average dilution (%)
- -1.07
- 3-year average SBC / revenue (%)
- 0.44
- cashConversionGrade
- 0.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Reported 2025 operating cash flow of $4.5 billion, reduced capital expenditures and higher 2026 debt repayments support financial discipline. Repeated large impairments and a $625 million facility commitment with a full residual-value guarantee temper that assessment. Investment returns and management attribution remain incomplete.
incentive alignment · 3/4 · The disclosed 2025 PSU structure combines three-year relative TSR, organic sales growth and cumulative free cash flow, with a negative-TSR payout cap. Annual incentives were paid against actual results. These are concrete alignment mechanisms, although ownership amounts and realized long-term payouts are missing; the proposed plan amendment is not treated as stockholder-approved.
execution · 1/4 · Actual procurement efficiencies and cash generation are positives, but sustained sales declines, unfavorable volume/mix and falling North American adjusted operating income indicate weak overall execution. This assesses operating outcomes rather than attributing all historical results to the recently appointed leadership.
governance · 3/4 · Disclosed practices include an independent chair separate from the CEO, independent committees, annual majority director elections, written consent and special-meeting rights, and anti-hedging and pledging policies. These support strong formal governance, while effectiveness through adverse operating periods remains less established; nominee independence is not treated as a completed election result.
Evidence
We consider our intellectual property rights, particularly and most notably our trademarks, but also our patents, trade secrets, trade dress, copyrights, and licensing agreements, to be a significant and valuable aspect of our business.
Intellectual property risk discussion · Filed 12/02/2026
We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright, trade secret, and trade dress laws, as well as licensing agreements, third-party nondisclosure and assignment agreements, policing of third-party misuses of our intellectual property, and securing our information technology systems.
Intellectual property protection practices · Filed 12/02/2026
Our Accelerate role contains platforms that are expected to have high growth potential, generate higher gross margins, and are in markets in which we have higher market share.
Note 21, platform portfolio roles · Filed 12/02/2026
These pressures have restricted, and may in the future continue to restrict, our ability to increase prices and maintain those price increases in response to commodity and other cost increases, including those related to inflationary pressures.
Competition and realized restrictions on pricing · Filed 12/02/2026
Net sales by platform were (in millions): December 27, 2025 December 28, 2024 December 30, 2023 ACCELERATE Taste Elevation $ 11,281 $ 11,371 $ 11,573 Easy Ready Meals 4,068 4,310 4,437 Substantial Snacking 1,532 1,668 1,853 Total Accelerate $ 16,881 $ 17,349 $ 17,863 PROTECT Desserts $ 1,123 $ 1,152 $ 1,153 Hydration 2,095 2,129 2,242 Total Protect $ 3,218 $ 3,281 $ 3,395 BALANCE Cheese $ 1,657 $ 1,746 $ 1,786 Coffee 867 835 891 Meats 1,924 2,136 2,197 Other 395 499 508 Total Balance $ 4,843 $ 5,216 $ 5,382 Total net sales $ 24,942 $ 25,846 $ 26,640 The net sales by platform for the years ended December 28, 2024 and December 30, 2023 presented in the table above has been corrected to conform to our previously disclosed platform definitions.
Note 21, 2023–2025 net sales by platform · Filed 12/02/2026
Organic Net Sales decreased 2.0% to $9.1 billion for the six months ended June 27, 2026 compared to $9.2 billion for the six months ended June 28, 2025, primarily due to unfavorable volume/mix (2.7 pp), which more than offset higher pricing (0.7 pp).
North America, six-month 2026 organic sales, pricing and volume/mix · Filed 05/08/2026
Segment Adjusted Operating Income decreased 15.8% to $1.0 billion for the three months ended June 27, 2026 compared to $1.2 billion for the three months ended June 28, 2025, primarily due to unfavorable volume/mix, increased advertising expenses, inflationary pressures in manufacturing and logistics costs that outpaced our efficiency initiatives, and higher variable compensation and related tax expenses.
North America, second-quarter 2026 adjusted operating income drivers · Filed 05/08/2026
The Kraft Heinz Company Condensed Consolidated Statements of Income (in millions, except per share data) (Unaudited) For the Three Months Ended For the Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Net sales $ 6,262 $ 6,352 $ 12,309 $ 12,351 Cost of products sold 4,234 4,169 8,062 8,104 Gross profit 2,028 2,183 4,247 4,247 Selling, general and administrative expenses, excluding impairment losses 1,107 891 2,168 1,759 Goodwill impairment losses 2,441 6,694 2,441 6,694 Intangible asset impairment losses 4,911 2,572 4,924 2,572 Selling, general and administrative expenses 8,459 10,157 9,533 11,025 Operating income/(loss) (6,431) (7,974) (5,286) (6,778) Interest expense/(income) (31) 240 205 469 Other expense/(income) (24) (47) (125) (98) Income/(loss) before income taxes (6,376) (8,167) (5,366) (7,149) Provision for/(benefit from) income taxes (916) (344) (705) (40) Net income/(loss) (5,460) (7,823) (4,661) (7,109) Net income/(loss) attributable to noncontrolling interest — 1 1 3 Net income/(loss) attributable to common shareholders $ (5,460) $ (7,824) $ (4,662) $ (7,112) Per share data applicable to common shareholders: Basic earnings/(loss) $ (4.60) $ (6.60) $ (3.93) $ (5.98) Diluted earnings/(loss) (4.60) (6.60) (3.93) (5.98) See accompanying notes to the condensed consolidated financial statements.
Condensed consolidated statements of income · Filed 05/08/2026
These unfavorable impacts to Segment Adjusted Operating Income more than offset higher pricing and efficiency initiatives in procurement that outpaced inflationary pressures.
North America, procurement efficiencies and pricing offsets · Filed 05/08/2026
We may need to reduce our prices, or be restricted or delayed in our ability to increase prices, in response to competitive, customer, consumer, regulatory, or macroeconomic pressures, including pressures related to private label products that are generally sold at lower prices.
Competition, private-label pressure and pricing constraints · Filed 12/02/2026
AT A GLANCE $24.9B Net Sales 33.3% Gross Profit Margin ($4.7B) Operating Income $4.7B Adjusted Operating Income* ($4.93) Diluted EPS $2.60 Adjusted EPS* $4.5B Net Cash Provided by Operating Activities $3.7B Free Cash Flow* * Non-GAAP financial measure.
2025 performance overview, operating cash flow and non-GAAP free cash flow · Filed 03/04/2026
Total depreciation and amortization expense by segment was (in millions): December 27, 2025 December 28, 2024 December 30, 2023 Depreciation and amortization expense: North America $ 638 $ 614 $ 561 International Developed Markets 150 156 157 Total segment depreciation and amortization expense 788 770 718 Emerging Markets 112 106 157 General corporate 68 72 86 Total depreciation and amortization expense $ 968 $ 948 $ 961 Total capital expenditures by segment were (in millions): December 27, 2025 December 28, 2024 December 30, 2023 Capital expenditures: North America $ 497 $ 643 $ 604 International Developed Markets 112 154 178 Total segment capital expenditures 609 797 782 Emerging Markets 105 115 163 General corporate 87 112 68 Total capital expenditures $ 801 $ 1,024 $ 1,013 107 We manage our product portfolio through eight consumer-driven product platforms: Taste Elevation, Easy Ready Meals, Substantial Snacking, Desserts, Hydration, Cheese, Coffee, and Meats.
Note 21, historical capital expenditures · Filed 12/02/2026
This change was primarily driven by higher debt repayments in the current year period, and lower debt proceeds received from the issuance of the 2026 Notes in the current year period compared to 2025 Notes in the prior year period.
Liquidity and capital resources, debt repayments and issuance · Filed 05/08/2026
Synthetic Lease Arrangements In June 2023, we entered into a non-cancellable synthetic lease for a distribution facility, for which we are the construction agent, for which we now anticipate the estimated construction cost to be approximately $625 million.
Synthetic lease, distribution facility construction commitment · Filed 05/08/2026
The lease arrangement contains a residual value guarantee of 100% of the total construction cost.
Synthetic lease, residual value guarantee · Filed 05/08/2026
Our 2025 PSUs feature a three-year performance period and are based 40% on three-year average annual Company TSR performance relative to the performance peer group, with TSR achievement capped at target in the event the Company has a negative TSR; 30% on three-year Organic Net Sales compound annual growth rate (CAGR); and 30% on three-year cumulative Free Cash Flow.
2025 PSU performance period, metrics and negative-TSR cap · Filed 03/04/2026
Annual incentive award payments were made in cash to each NEO after the end of 2025 based on actual results achieved.
Executive compensation, actual annual incentive payments · Filed 03/04/2026
STOCKHOLDER RIGHTS Proactive Year-Round Engagement with stockholders and incorporation of stockholder input in our strategies and programs Annual Election of Directors with Majority Voting Standard in uncontested elections Annual Say-on-Pay Votes Stockholder Right to Call Special Meetings for stockholders of record of at least 20% of the voting power of our outstanding stock No “Poison Pill” Stockholder Action by Written Consent BOARD COMPOSITION AND LEADERSHIP Separate Chair and Chief Executive Officer Roles with an independent Chair Continuous Refreshment emphasizing a diversity of views and experiences and sound judgment to best perpetuate our success and stockholder interests Robust Independence, with 9 of 10 director nominees independent 100% Independent Committees of the Board Executive Sessions (including sessions without management present and sessions of the independent directors) at each Board meeting Director Time Commitments Policy limits service on the boards of other public companies to three or, for chief executive officers of public companies, one (each in addition to Kraft Heinz) Annual Performance Evaluations for the Board and all Committees of the Board Robust Director Selection Process Active Oversight of Risks related to the Company’s business, including sustainability risks Special Meetings of the Board may be called by our CEO, Chair, a majority of directors, or any Committee Chair with the support of at least two other directors OTHER BEST PRACTICES Rigorous Stock Ownership Requirements to align directors’ and executive officers’ interests with those of stockholders Robust Clawback Policy Insider Trading Policy, including Anti-Hedging and Pledging Policies 2026 Proxy Statement 23 Table of Contents Company Overview Voting Roadmap Stockholder Engagement Our Board Governance Director Compensation Beneficial Ownership Executive Compensation Audit Matters Other Information Appendix A Non-GAAP Appendix B A&R Plan BOARD STRUCTURE AND OPERATIONS 11 BOARD MEETINGS IN 2025 KEY RESPONSIBILITIES IN 2025 • Development of and progress on our long-term strategic plan • Review of strategic alternatives • Capital structure and capital allocation strategy • Risk oversight • Succession planning MANAGEMENT ATTENDANCE AT BOARD MEETINGS Key members of management regularly attend and participate in Board and Committee meetings.
Corporate governance highlights and board practices · Filed 03/04/2026
The approval and adoption of the A&R 2020 Omnibus Plan is subject to approval and ratification by Kraft Heinz stockholders at the Annual Meeting.
Proposed amended incentive plan, required stockholder approval · Filed 03/04/2026
