Company: KHC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001637459-25-000061
Chunk: 103

Company: Kraft Heinz Co
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 8
Chunk 103
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EPDM” or “International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”). We have two reportable segments defined by geographic region: North America and International Developed Markets. Our remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.

See Note 16, Segment Reporting, in Item 1, Financial Statements, for our financial information by segment.

Acquisitions and Divestitures:

In the first quarter of 2024, we closed the sale of the Russia Infant Transaction and the Papua New Guinea Transaction, both within Emerging Markets. See Note 4, Acquisitions and Divestitures, in Item 1, Financial Statements, for additional information on divestiture activities.

Business Trends and Items Affecting Comparability of Financial Results

Inflation, Supply Chain, and Tariff Impacts:

During the three months ended March 29, 2025, we continued to experience inflationary pressures at rates in line with those experienced throughout 2024. We are closely monitoring the recent tariff and trade policy actions changes taken by the United States and foreign governments. As the situation continues to remain fluid due to the rapidly changing global trade environment, we are still evaluating the potential implications of these actions on our business. If enacted as currently outlined, we expect that the proposed trade policy changes would primarily impact a subset of our North America segment (primarily within our Hydration and Coffee platforms). We anticipate an increase in cost of products sold due to certain raw materials currently sourced from outside of the U.S. as well as the impact of tariffs on certain products that are part of our integrated supply chain that spans the U.S. and Canada. During the three months ended March 29, 2025, these tariff actions have not had a significant impact on our results of operations; however, we have experienced increased foreign currency exchange rate volatility, which we attribute, in part, to the rapidly changing global trade environment. 

While the ultimate impact of tariffs remains uncertain and we anticipate taking measures to attempt to mitigate these negative cost impacts, these tariff and trade policy actions may have a material impact on our results of operations. Further, we expect that there could be a difference between the timing of when these mitigation actions impact our results of operations and when the cost inflation is incurred, and that any pricing actions we take could negatively impact our market share.

Results of Operations

We disclose in this report certain non-GAAP financial measures. These non-GAAP financial measures assist management in