Kraft Heinz beats quarterly estimates as prices soar By Stocksak

© Stocksak. FILEPHOTO: A shelf in a Tesco supermarket in London, Britain June 30, 2022 shows plastic bottles of Heinz tomatoketchup. REUTERS/Simon Newman

By Mehr Bedi and Granth Vanaik

(Stocksak). -Kraft Heinz Co reported Wednesday a surprise increase in quarterly revenue that topped earnings estimates. The Jell-O and Philadelphia Cream Cheese makers benefited from price increases as well as improved supplies to retailers.

These results are similar to those from General Mills (NYSE 🙂 and Kellogg (NYSE 🙂 illustrate how multiple price increases in the past year to compensate for higher labor, ingredients and transport costs are yet to significantly impact demand.

Kraft reported that average selling prices increased by 15.4 percentage points during the third quarter, while sales volumes fell by 3.8 percentage points.

“Sales were strong, volumes only slightly lower than Street modeled, and pricing higher,” Ken Goldman, J.P. Morgan analyst, stated in a note.

Inflation-stricken consumers are also helping package food manufacturers. They continue to follow the pandemic-fueled preference to cook at home, but analysts warn that they may be approaching their limit on price increases.

Kraft Chief Executive Miguel Patricio said there was continued consumption growth across all income levels in the quarter with market share gains in categories like Lunchables and Kraft Mac & Cheese cups as the company had increased capacity by fixing supply-chain constraints.

According to Arun Sundaram, CFRA analyst, Kraft’s market share is directly tied to availability on shelves. He added that “if they get products onto the shelves, the consumers are buying them despite price increases.”

Net sales increased to $6.51 Billion from $6.32 Billion a year ago. According to IBES data from Refinitiv, analysts had predicted $6.27 billion on average.

Earnings excluding these items were 63 cents per sen, exceeding expectations of 56 cents

The shares of the company traded marginally lower during wider market declines.

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Stocksak Editorial

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