Company: KHC
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001637459-25-000152
Chunk: 56

Company: Kraft Heinz Co
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 1
Chunk 56
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(a)    Adjusted Operating Income is a non-GAAP financial measure. See the Non-GAAP Financial Measures section at the end of this item.

Three Months Ended June 28, 2025 Compared to the Three Months Ended June 29, 2024:

Operating income/(loss) decreased 1,627.6% to a loss of $8.0 billion for the three months ended June 28, 2025 compared to income of $522 million for the three months ended June 29, 2024, primarily due to non-cash impairment losses that were $8.4 billion higher in the current year period. In addition to the impact of these non-cash impairment losses, operating income/(loss) decreased $84 million driven by increased commodity cost inflation, which more than offset our efficiency initiatives, and unfavorable volume/mix. These unfavorable impacts to operating income/(loss) were partially offset by higher pricing, decreased SG&A, primarily due to lower advertising expense, and favorable changes in unrealized losses/(gains) on commodity hedges.

Net income/(loss) decreased 7,923.0% to a loss of $7.8 billion for the three months ended June 28, 2025 compared to income of $100 million for the three months ended June 29, 2024. This decrease was due to the unfavorable changes in operating income/(loss) factors discussed above, higher interest expense, and unfavorable changes in other expense/(income), partially offset by lower income tax expense.

•Our effective tax rate for the three months ended June 28, 2025 was a benefit of 4.2% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 21.6%. Our effective tax rate for the three months ended June 29, 2024 was an expense of 71.1% on pre-tax income, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 50.8%. The year-over-year change in the effective tax rate for the three-month period was primarily driven by the impact of non-deductible goodwill impairments and a less favorable geographic mix of pre-tax income in various non-U.S. jurisdictions primarily due to the changes made to our corporate entity structure in December 2024.

•Other expense/(income) was $47 million of income for the three months ended June 28, 2025 compared to $55 million of income for