Kraft Heinz beats profit estimates on higher product prices

(Reuters) – Kraft Heinz (NASDAQ:) beat Wall Street estimates for third-quarter profit and raised its annual forecast as the Jell-O maker’s margins benefited from higher prices of its packaged meals and condiments.

Its shares edged up 1% to $31.7 in premarket trading.

Packaged food makers from Kellogg (NYSE:) and Coca-Cola (NYSE:) Co to General Mills (NYSE:) have hiked product prices steadily as consumers continue to spend on their quick-fix meals and condiments.

Kraft’s adjusted gross margin for the quarter expanded 396 basis points to 34%.

It logged adjusted earnings of 72 cents per share for the quarter, above analysts’ estimates of 63 cents.

The Philadelphia Cream Cheese maker forecast full-year adjusted profit to be in the range of $2.91 to $2.99 per share, compared with its previous range of $2.83 to $2.91.

However, its overall volumes declined 5.4 percentage points, signaling that price hikes over the last several quarters were taking a toll as customers struggle with high interest rates.

The company’s net sales rose to $6.57 billion for the quarter ended Sept. 30 from $6.51 billion a year earlier. Analysts on average had expected $6.72 billion, according to LSEG data.

(This story has been corrected to change the overall volumes decline to to 5.4 percentage points, not 5.4%, in paragraph 7)