In this news, we discuss the Rise in at-home cooking helps Kraft Heinz beat sales expectations.
(Reuters) – Kraft Heinz Co KHC.O beat third-quarter revenue guidance on Thursday as consumers bought more of its packaged food and condiments for home cooking, increasing its shares by about 4% in trade before marketing.
The surge in demand brought on by the pandemic has been a boon for Kraft, which has struggled with weak sales and forced to downgrade the value of several billion-dollar brands over the past two years.
The company, known for its brands ranging from Philadelphia cream cheese to Heinz ketchup, said quarterly sales rose 6% to $ 6.44 billion, beating the average analyst estimate of 6.32 billion. dollars, according to data from Refinitiv.
Sales in the United States, its largest market, rose 7.4%, helped by a 4 percentage point increase in prices due to reduced promotional activity from a year earlier and to offset higher prices. price of dairy products.
To save $ 2 billion by 2024 and end weak sales, Kraft announced last month that it would sell its natural cheese business to French dairy company Groupe Lactalis for $ 3.2 billion, increase its marketing budget and overhaul its supply chain.
It took a non-cash loss of $ 300 million related to the sale of its cheese activities during the quarter.
Compared to its peers, Kraft has generated the largest increase in sales over the past 12 weeks in US retail stores. It rose 9.8% for Kraft, 5% for Kellogg and 8.7% for General Mills GIS.N, according to data provided to Guggenheim by Nielsen.
Organic sales, which remove the effects of mergers and acquisitions and currency fluctuations, rose 6.3% in the quarter and the company said it continued to expect organic sales growth at a single digit for the fourth quarter.
For the full year, Kraft has raised its adjusted basic profit forecast to high to single digits from the middle.
Excluding items, the Chicago-based company gained 70 cents per share in the current quarter.
Report by Siddharth Cavale in Bengaluru; Editing by Sriraj Kalluvila and Arun Koyyur
Original © Thomson Reuters