Kraft Heinz trims 2024 forecasts as high prices hinder demand

(Reuters) -Kraft Heinz on Wednesday tempered its annual forecasts for organic sales and profit as repeated price hikes hurt demand for the packaged food giant’s branded products including Lunchables meal kits and Oscar Mayer cold cuts.

Shares of the Jell-O maker fell more than 3% before the bell, as it also posted a steeper-than-expected fall in revenue for the third quarter.

Kraft Heinz (NASDAQ:) has struggled to hold on to market share as value-seeking consumers cut back spending on packaged food items such as Capri Sun and Mac & Cheese, following price hikes over the last few years.

Overall volumes at the company declined 3.4 percentage points, with prices rising by 1.2 percentage points in the quarter.

“When we look at our U.S. Retail business, we are expecting more of an elongated recovery, driven by specific categories that continue to experience pressure,” CEO Carlos Abrams-Rivera said.

Customers have pivoted to cheaper, private-label alternatives, prompting packaged food makers like Kraft Heinz to reduce prices in the U.S. on some items such as sauces and mayonnaise.

The company forecast annual organic net sales to be at the low end of its earlier range of flat to down 2% from last year, while adjusted earnings per share is now expected to be at the low end of its prior range of $3.01 to $3.07.

Its adjusted gross profit margin rose 30 basis points to 34.3% for the quarter ended Sept. 28.

The packaged food giant earned 75 cents per share on an adjusted basis in the third quarter, beating analysts’ estimates of 74 cents, according to data compiled by LSEG.

Its net sales fell 2.8% to $6.38 billion, compared with estimates of $6.42 billion.