We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Kraft Heinz (KHC) Q2 Earnings Beat Estimates, Sales Miss
Read MoreHide Full Article
The Kraft Heinz Company (KHC - Free Report) posted second-quarter 2023 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line beat the same. Both metrics increased year over year. Sales grew in the North America and International regions, and results continued to gain from strength in the foodservice, emerging markets and U.S. Retail Grow platforms.
For 2023, management reaffirmed its guidance for adjusted EBITDA, adjusted earnings per share (EPS) and organic net sales growth.
Quarter in Detail
Kraft Heinz posted adjusted earnings of 79 cents per share, beating the Zacks Consensus Estimate of 74 cents. Quarterly earnings jumped 12.9% year over year, mainly due to increased adjusted EBITDA and reduced interest expenses. These were partly negated by adverse changes in other expenses/(income).
The company generated net sales of $6,721 million, up 2.6% year over year. Net sales included an unfavorable currency impact of 1.2 percentage points and an adverse impact of 0.2 percentage points from acquisitions and divestitures. Net sales missed the Zacks Consensus Estimate of $6,805 million.
Organic net sales increased 4% year over year. Pricing rose 11 percentage points year over year, reflecting growth in both segments. The upside can be attributed to higher list prices. The volume/mix fell 7 percentage points due to the elasticity effect of pricing actions.
The gross profit of $2,261 million jumped by 14% from the figure reported in the year-ago quarter. The gross margin came in at 33.6% compared with our estimate of 33.2%.
Adjusted EBITDA advanced 6% to $1,612 million due to elevated pricing and efficiency gains. These were somewhat negated by elevated supply-chain costs, an adverse volume/mix, currency headwinds and investments related to marketing, technology and research & development. Supply-chain costs included inflation across procurement and manufacturing costs.
Kraft Heinz Company Price, Consensus and EPS Surprise
North America: Net sales of $5,079 million increased 0.8% year over year. During the quarter, pricing moved up 9.4 percentage points, but volume/mix fell 8.1 percentage points. In the quarter, we had expected sales of $5,200 million from the segment.
International: Net sales of $1,642 million were up 8.5% year over year. Pricing moved up 16.5 percentage points, but the volume/mix slipped 3.3 percentage points.
Other Financial Aspects
Kraft Heinz ended the quarter with cash and cash equivalents of $947 million, long-term debt of $19,367 million and total shareholders’ equity of $49,814 million. Net cash provided by operating activities was $1,584 million for the first six months of 2023. The company has generated free cash flow of $1,076 million year to date.
In a separate press release, Kraft Heinz declared a quarterly dividend of 40 cents per share, payable on Sep 29, 2023, to shareholders of record as of Sep 1.
Guidance
For 2023, management reaffirmed its financial outlook. It expects organic net sales growth of 4-6%.
Adjusted EBITDA is still expected to increase 4-6% in 2023 on a constant-currency or cc basis. Excluding the impacts of the 53rd week in 2022, it is likely to rise 6-8%.
Management expects an adjusted gross margin expansion, driven by pricing and gross efficiencies. However, it expects mid to high-single-digit inflation in 2023, including low to mid-single-digit inflation in the second half of the year. The adjusted gross profit margin is likely to increase 150-200 basis points in 2023 compared with the expansion of 125-175 basis points expected earlier.
The adjusted EPS for the year is still envisioned in the band of $2.83-$2.91, which includes a nearly 4-cent expected impact of adverse changes in non-cash pension and post-retirement benefits and a roughly 2-cent impact of currency woes.
Shares of this Zacks Rank #4 (Sell) company have lost 10.9% in the past three months compared with the industry’s decline of 4.3%.
Post Holdings currently has a Zacks Rank #2 (Buy). POST has a trailing four-quarter earnings surprise of 46.7%, on average. The Zacks Consensus Estimate for Post Holdings’ current fiscal-year sales and earnings suggests growth of 13% and 141.1%, respectively, from the year-ago reported figures. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Coty has a Zacks Rank #2 at present. The Zacks Consensus Estimate for COTY’s current financial year’s sales and EPS suggests growth of 4.2% and 92.9%, respectively, from the year-ago reported figures. COTY has a trailing four-quarter earnings surprise of 145%, on average.
Church & Dwight currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CHD’s current financial-year sales and earnings per share suggests growth of 8% and 6.1%, respectively, from the year-ago reported figures. CHD has a trailing four-quarter earnings surprise of 12.1%, on average.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Kraft Heinz (KHC) Q2 Earnings Beat Estimates, Sales Miss
The Kraft Heinz Company (KHC - Free Report) posted second-quarter 2023 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line beat the same. Both metrics increased year over year. Sales grew in the North America and International regions, and results continued to gain from strength in the foodservice, emerging markets and U.S. Retail Grow platforms.
For 2023, management reaffirmed its guidance for adjusted EBITDA, adjusted earnings per share (EPS) and organic net sales growth.
Quarter in Detail
Kraft Heinz posted adjusted earnings of 79 cents per share, beating the Zacks Consensus Estimate of 74 cents. Quarterly earnings jumped 12.9% year over year, mainly due to increased adjusted EBITDA and reduced interest expenses. These were partly negated by adverse changes in other expenses/(income).
The company generated net sales of $6,721 million, up 2.6% year over year. Net sales included an unfavorable currency impact of 1.2 percentage points and an adverse impact of 0.2 percentage points from acquisitions and divestitures. Net sales missed the Zacks Consensus Estimate of $6,805 million.
Organic net sales increased 4% year over year. Pricing rose 11 percentage points year over year, reflecting growth in both segments. The upside can be attributed to higher list prices. The volume/mix fell 7 percentage points due to the elasticity effect of pricing actions.
The gross profit of $2,261 million jumped by 14% from the figure reported in the year-ago quarter. The gross margin came in at 33.6% compared with our estimate of 33.2%.
Adjusted EBITDA advanced 6% to $1,612 million due to elevated pricing and efficiency gains. These were somewhat negated by elevated supply-chain costs, an adverse volume/mix, currency headwinds and investments related to marketing, technology and research & development. Supply-chain costs included inflation across procurement and manufacturing costs.
Kraft Heinz Company Price, Consensus and EPS Surprise
Kraft Heinz Company price-consensus-eps-surprise-chart | Kraft Heinz Company Quote
Segment Discussion
North America: Net sales of $5,079 million increased 0.8% year over year. During the quarter, pricing moved up 9.4 percentage points, but volume/mix fell 8.1 percentage points. In the quarter, we had expected sales of $5,200 million from the segment.
International: Net sales of $1,642 million were up 8.5% year over year. Pricing moved up 16.5 percentage points, but the volume/mix slipped 3.3 percentage points.
Other Financial Aspects
Kraft Heinz ended the quarter with cash and cash equivalents of $947 million, long-term debt of $19,367 million and total shareholders’ equity of $49,814 million. Net cash provided by operating activities was $1,584 million for the first six months of 2023. The company has generated free cash flow of $1,076 million year to date.
In a separate press release, Kraft Heinz declared a quarterly dividend of 40 cents per share, payable on Sep 29, 2023, to shareholders of record as of Sep 1.
Guidance
For 2023, management reaffirmed its financial outlook. It expects organic net sales growth of 4-6%.
Adjusted EBITDA is still expected to increase 4-6% in 2023 on a constant-currency or cc basis. Excluding the impacts of the 53rd week in 2022, it is likely to rise 6-8%.
Management expects an adjusted gross margin expansion, driven by pricing and gross efficiencies. However, it expects mid to high-single-digit inflation in 2023, including low to mid-single-digit inflation in the second half of the year. The adjusted gross profit margin is likely to increase 150-200 basis points in 2023 compared with the expansion of 125-175 basis points expected earlier.
The adjusted EPS for the year is still envisioned in the band of $2.83-$2.91, which includes a nearly 4-cent expected impact of adverse changes in non-cash pension and post-retirement benefits and a roughly 2-cent impact of currency woes.
Shares of this Zacks Rank #4 (Sell) company have lost 10.9% in the past three months compared with the industry’s decline of 4.3%.
Stocks to Consider
Some better-ranked companies are Post Holdings (POST - Free Report) , Coty (COTY - Free Report) and Church & Dwight Co. (CHD - Free Report) .
Post Holdings currently has a Zacks Rank #2 (Buy). POST has a trailing four-quarter earnings surprise of 46.7%, on average. The Zacks Consensus Estimate for Post Holdings’ current fiscal-year sales and earnings suggests growth of 13% and 141.1%, respectively, from the year-ago reported figures. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Coty has a Zacks Rank #2 at present. The Zacks Consensus Estimate for COTY’s current financial year’s sales and EPS suggests growth of 4.2% and 92.9%, respectively, from the year-ago reported figures. COTY has a trailing four-quarter earnings surprise of 145%, on average.
Church & Dwight currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CHD’s current financial-year sales and earnings per share suggests growth of 8% and 6.1%, respectively, from the year-ago reported figures. CHD has a trailing four-quarter earnings surprise of 12.1%, on average.