Kraft Heinz beats profit estimates on higher product prices
2023.11.01 08:20
© Reuters. FILE PHOTO: Bottles of Heinz Tomato Ketchup, a brand owned by The Kraft Heinz Company, are seen in a store in Manhattan, New York, U.S., November 11, 2021. REUTERS/Andrew Kelly
(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)
