Heinz brand tomato ketchup arranged in the borough of Brooklyn on Friday July 22, 2022 in New York, USA. Kraft Heinz Co. is expected to release earnings results on July 27th.
Gaby Jones | Bloomberg | Getty Images
Kraft Heinz surpassed Wall Street earnings and revenue expectations on Wednesday but offered a soft earnings forecast for the year, a sign of mounting pressure from higher costs.
Shares of the Pittsburgh-based company, whose brands include Oscar Meyer, Philadelphia Cream Cheese and Lunchables, were little changed in premarket trading.
Here’s how the company has fared compared to analyst estimates, according to Refinitiv:
- Revenue: $7.38 billion versus $7.27 billion expected
- Adjusted earnings per share: 85 cents vs. 78 cents expected
Net sales for the fourth quarter increased 10% year over year to $7.38 billion. The company also turned a profit during the period, reporting net income of $887 million, or 72 cents of earnings per share, compared to a loss of $255 million, or 21 cents per share, a year earlier. Excluding special items, earnings per share for the most recent quarter were 85 cents.
However, the company expects adjusted earnings of $2.67 and $2.75 per share for the year, down from analyst estimates of $2.77 per share, according to Refinitiv.
Although packaged food companies have raised prices over the past two years, they are still grappling with rising raw material costs and supply chain issues. Kraft Heinz increased prices by 15.2% on a 4.8% decline in volume. The company cited pricing pressure and supply shortages to describe why volumes were falling.
Despite beating sales and EPS, Kraft Heinz’s earnings contrast with companies like Oreo Maker Mondelēz Internationalwhich saw little decline in demand despite price increases.
The company expects organic net sales growth of 4% to 6% for 2023, slightly above estimates of 4.8%.
Kraft Heinz launched a campaign before Super Bowl 57 called “LVII Meanz 57” protesting the use of Roman numerals. According to a press release, the brand launched a website where consumers could vote on whether or not to drop Roman numerals.
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