Revenue Increases Boost Kraft Heinz's Profit Guidance‍

February 15, 2023

minute read

On Wednesday, Kraft Heinz exceeded Wall Street's expectations for earnings and sales, but provided weak profit guidance for the year, signaling increasing pressure from growing prices.

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In premarket trade, the company's shares barely changed. Its brands include Oscar Meyer, Philadelphia Cream Cheese, and Lunchables.

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According to Trade Algo, the corporation performed as follows in comparison to analysts' predictions:

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Revenue: $7.38 billion versus the anticipated $7.27 billion

85 cents in adjusted earnings per share compared to the projected 78 cents

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Net revenues for the fourth quarter increased 10% year over year to $7.38 billion. In the period, the business turned a profit as well, posting $887 million in net income, or 72 cents in earnings per share, compared to a loss of $255 million, or 21 cents a share, a year earlier. Earnings per share for the most recent quarter were 85 cents before items.

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Trade Algo anticipates that the business will report adjusted earnings of $2.67 to $2.75 per share for the year, falling short of analyst expectations of $2.77 per share.

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Despite pricing increases over the past two years, supply chain problems and growing commodity costs continue to be a problem for the packaged food industry. Kraft Heinz increased pricing by 15.2% despite a 4.8% volume reduction. The company attributed the decline in volumes to price pressures and supply issues.

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Kraft Heinz's profits contrast with those of firms like Mondelz International, the producer of Oreos, which saw little demand resistance despite price rises despite surpassing revenue and EPS.

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In 2023, the company projects organic net sales growth of 4% to 6%, somewhat higher than the anticipated growth of 4.8%.

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In opposition to the usage of Roman numerals, Kraft Heinz started a campaign called "LVII Meanz 57" before Super Bowl 57. According to a press release, the company developed a website where customers could vote on whether or not Roman numerals should be eliminated.