Kraft Heinz Halts Separation and Raises 2026 Sales Outlook Despite Second-Quarter Decline
Key Facts
Kraft Heinz halted work related to splitting the company into two independent entities and raised its 2026 organic sales outlook in August, while third-quarter results had not yet been released as of October 26. The company said on February 11 that it was "prudent to pause work related to the separation," explaining that its focus was on its operating plan and a return to profitable growth. This corrects an earlier draft that said the split had been confirmed, third-quarter sales had declined and the annual outlook had been cut; the official date for reporting that quarter's results was November 4. The latest published results in the available evidence are for the second quarter, showing year-over-year declines in net sales and organic sales. At the same time, the company narrowed the range of its expected full-year organic sales decline.
Net sales were $6.262 billion in the second quarter ended June 27, 2026, compared with $6.352 billion in the corresponding period ended June 28, 2025, a decline of 1.4%, according to company results. Organic sales fell 1.3% in the same quarter. Sales details showed that pricing added 1.3 percentage points to year-over-year growth, while volume and mix subtracted 2.6 percentage points. Volume and mix pressure therefore outweighed the positive contribution from pricing, consistent with continued contraction in organic sales despite improved pricing. The available results do not support attributing third-quarter weakness to coffee, cold cuts, frozen snacks or condiments, because the company had not reported that quarter's results.
In its August update, Kraft Heinz raised its forecast range for the 2026 organic sales decline to between 0.5% and 2.0%, from a previous range of between 1.5% and 3.5%, according to Reuters. The revision means the company now expects a smaller decline than in its previous estimates, while its full-year forecast remains negative. The outlook increase came after the second-quarter results, even though organic sales remained lower year over year. But the stock moved in the opposite direction on August 5, falling about 4% in afternoon trading, with Reuters reporting that investor doubts about turnaround efforts led by Chief Executive Steve Cahillane weighed on it. That puts the improved outlook against continuing questions Reuters reported about management's ability to execute the turnaround.
The separation plan had received unanimous board approval in September 2025, and the proposal called for creating two independent publicly traded companies through a tax-free distribution. Under the original plan, Global Taste Elevation was to include businesses with sales of about $15.4 billion in 2024, while North American Grocery had sales of about $10.4 billion. But the company's February 2026 announcement halted work related to the separation, as it shifted resources to its operating plan and profitable growth. Reuters said the pause had no set end date and was expected to save $300 million in costs in 2026. In its quarterly filing in June, the company said the likelihood and timing of resuming the separation, or completing it, remained uncertain.
The decision to focus on the operating plan was accompanied by the company's announcement of a $600 million investment in marketing, sales, research and development, product improvements and selective pricing. After the second-quarter results, Kraft Heinz said it would increase additional investments by $100 million, bringing them to about $700 million in 2026. In the second quarter, the company recorded an operating loss of $6.4 billion, driven by noncash impairment charges of $7.4 billion. For the previous year, net sales in 2025 fell 3.5% to $24.9 billion, and organic sales declined 3.4%. Fourth-quarter 2025 sales also fell 3.4% to $6.354 billion, compared with $6.576 billion in the corresponding period, while organic sales declined 4.2%.
The next event on the company's calendar is the release of third-quarter results on November 4, 2026, at 9:00 a.m. Eastern time, according to its investor relations calendar. Kraft Heinz will then hold its investor day in New York on November 12 at 10:30 a.m. Eastern time. The company said the meeting would present its long-term strategy, financial outlook and key milestones. These dates follow the halt to the separation project and the increase in the annual sales outlook, with the scheduled quarterly results providing the first date on the calendar to assess third-quarter performance. The investor day is set to present the strategy and outlook the company said it would outline.