Packaged foods company Kraft Heinz (NASDAQ: KHC) reported Q2 CY2026 results topping the market’s revenue expectations, but sales fell by 1.4% year on year to $6.26 billion. Its non-GAAP profit of $0.56 per share was 5.6% above analysts’ consensus estimates.
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Kraft Heinz (KHC) Q2 CY2026 Highlights:
- Revenue: $6.26 billion vs analyst estimates of $6.12 billion (1.4% year-on-year decline, 2.3% beat)
- Adjusted EPS: $0.56 vs analyst estimates of $0.53 (5.6% beat)
- Management slightly raised its full-year Adjusted EPS guidance to $2.06 at the midpoint
- Operating Margin: -103%, up from -126% in the same quarter last year
- Free Cash Flow Margin: 14.3%, down from 16.1% in the same quarter last year
- Organic Revenue fell 1.3% year on year (miss)
- Sales Volumes fell 2.6% year on year, in line with the same quarter last year
- Market Capitalization: $31.59 billion
Company Overview
The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ: KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $24.9 billion in revenue over the past 12 months, Kraft Heinz is one of the most widely recognized consumer staples companies. Its influence over consumers gives it negotiating leverage with distributors, enabling it to pick and choose where it sells its products (a luxury many don’t have). However, its scale is a double-edged sword because there are only so many big store chains to sell into, making it harder to find incremental growth. For Kraft Heinz to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.
As you can see below, Kraft Heinz’s revenue declined by 2.8% per year over the last three years as consumers bought less of its products.
This quarter, Kraft Heinz’s revenue fell by 1.4% year on year to $6.26 billion but beat Wall Street’s estimates by 2.3%.
Looking ahead, sell-side analysts expect revenue to decline by 1.5% over the next 12 months, similar to its three-year rate. it’s hard to get excited about a company that is struggling with demand.
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Volume Growth
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.
To analyze whether Kraft Heinz generated its growth (or lack thereof) from changes in price or volume, we can compare its volume growth to its organic revenue growth, which excludes non-fundamental impacts on company financials like mergers and currency fluctuations.
Over the last two years, Kraft Heinz’s average quarterly volumes have shrunk by 3.5%. This isn’t ideal for a consumer staples company, where demand is typically stable. In the context of its 2.6% average organic sales declines, we can see that most of the company’s losses have come from fewer customers purchasing its products.
In Kraft Heinz’s Q2 2026, sales volumes dropped 2.6% year on year. This result represents a further deceleration from its historical levels, showing the business is struggling to move its products.
Key Takeaways from Kraft Heinz’s Q2 Results
It was encouraging to see Kraft Heinz beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its organic revenue missed and its gross margin fell short of Wall Street’s estimates. Overall, this quarter was mixed. The stock remained flat at $26.47 immediately following the results.
Kraft Heinz’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
