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Kraft Heinz (KHC) Gains on Pricing Actions & Growth Pillars
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Focus on strategic growth pillars and robust pricing strategies are working for The Kraft Heinz Company (KHC - Free Report) . The consumer products company is leaving no stone unturned to transform its business to unleash its full potential.
Let’s delve deeper.
Pricing Actions Solid
Kraft Heinz is undertaking strategic pricing initiatives to improve its performance. In fact, robust pricing strategies have been shielding margin performance amid inflation. In the third quarter of 2023, the company’s organic net sales increased 1.7% on favorable pricing to the tune of 7.1 percentage points stemming from higher list prices to counter escalated input costs.
Quarterly adjusted gross margin expanded 396 basis points (bps) to 34%, driven by pricing actions undertaken to offset inflation, solid gross supply chain efficiencies and a favorable mix in North America. Management expects an adjusted gross margin expansion of 200-250 bps, driven by pricing and efficiencies in 2023.
Image Source: Zacks Investment Research
Growth Pillars: Key Drivers
Kraft Heinz has been benefiting from strength in its three key pillars — Foodservice, Emerging Markets and U.S. Retail Grow platforms. In the Foodservice business, management prioritizes higher margin spaces and undertakes customer-friendly innovations to drive growth. Kraft Heinz’s data-driven and repeatable go-to-market model has been yielding well across Emerging Markets. Strength in the company’s Heinz brand bodes well in such markets.
Transformation on Track
Kraft Heinz is committed to accelerating its profit and enhancing the long-term shareholders’ value. As part of its transformation phase, management unveiled AGILE@SCALE in February 2022. The strategy has been helping Kraft Heinz to improve its agile expertise and capabilities via partnerships with technology giants and cutting-edge innovators.
Management is on track to build its innovation pipeline aided by the Agile Innovation Engine. Strength in Kraft Heinz’s AGILE@SCALE and strategic partnerships are generating solutions throughout the value chain to drive growth and efficiency. As part of the AGILE@SCALE strategy, management is building digital-first solutions to fuel gross efficiencies.
Wrapping Up
Kraft Heinz is focused on enhancing productivity throughout its value chain and channeling operational efficiencies back into crucial areas. These investments are pivotal to KHC’s strategic framework. Strength in the company’s transformations coupled with gains from sales growth in the company’s three key pillars bodes well.
The Zacks Rank #2 (Buy) company’s shares have increased 2.5% in the past three months against the industry’s 4.8% decline.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 28.3% and 24.8%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145% on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29.4% from the year-ago reported figure.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 110.9% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 98.5% and 184.1%, respectively, from the year-ago reported numbers.
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Kraft Heinz (KHC) Gains on Pricing Actions & Growth Pillars
Focus on strategic growth pillars and robust pricing strategies are working for The Kraft Heinz Company (KHC - Free Report) . The consumer products company is leaving no stone unturned to transform its business to unleash its full potential.
Let’s delve deeper.
Pricing Actions Solid
Kraft Heinz is undertaking strategic pricing initiatives to improve its performance. In fact, robust pricing strategies have been shielding margin performance amid inflation. In the third quarter of 2023, the company’s organic net sales increased 1.7% on favorable pricing to the tune of 7.1 percentage points stemming from higher list prices to counter escalated input costs.
Quarterly adjusted gross margin expanded 396 basis points (bps) to 34%, driven by pricing actions undertaken to offset inflation, solid gross supply chain efficiencies and a favorable mix in North America. Management expects an adjusted gross margin expansion of 200-250 bps, driven by pricing and efficiencies in 2023.
Image Source: Zacks Investment Research
Growth Pillars: Key Drivers
Kraft Heinz has been benefiting from strength in its three key pillars — Foodservice, Emerging Markets and U.S. Retail Grow platforms. In the Foodservice business, management prioritizes higher margin spaces and undertakes customer-friendly innovations to drive growth. Kraft Heinz’s data-driven and repeatable go-to-market model has been yielding well across Emerging Markets. Strength in the company’s Heinz brand bodes well in such markets.
Transformation on Track
Kraft Heinz is committed to accelerating its profit and enhancing the long-term shareholders’ value. As part of its transformation phase, management unveiled AGILE@SCALE in February 2022. The strategy has been helping Kraft Heinz to improve its agile expertise and capabilities via partnerships with technology giants and cutting-edge innovators.
Management is on track to build its innovation pipeline aided by the Agile Innovation Engine. Strength in Kraft Heinz’s AGILE@SCALE and strategic partnerships are generating solutions throughout the value chain to drive growth and efficiency. As part of the AGILE@SCALE strategy, management is building digital-first solutions to fuel gross efficiencies.
Wrapping Up
Kraft Heinz is focused on enhancing productivity throughout its value chain and channeling operational efficiencies back into crucial areas. These investments are pivotal to KHC’s strategic framework. Strength in the company’s transformations coupled with gains from sales growth in the company’s three key pillars bodes well.
The Zacks Rank #2 (Buy) company’s shares have increased 2.5% in the past three months against the industry’s 4.8% decline.
Other Solid Food Picks
Lamb Weston (LW - Free Report) , which offers frozen potato products, sports a Zacks Rank #1 (Strong Buy). LW has a trailing four-quarter earnings surprise of 46.2% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 28.3% and 24.8%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145% on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29.4% from the year-ago reported figure.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 110.9% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 98.5% and 184.1%, respectively, from the year-ago reported numbers.