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The Kraft Heinz Company (KHC - Free Report) posted robust fourth-quarter 2022 results, wherein the top and bottom lines increased year over year and surpassed the Zacks Consensus Estimate. The company performed strongly, even amid a tough operating landscape marked by inflation and supply-chain bottlenecks, which is worth noting.
Quarter in Detail
Kraft Heinz posted adjusted earnings of 85 cents a share, beating the Zacks Consensus Estimate of 77 cents. Quarterly earnings jumped 7.6% year over year, mainly due to the performance of ongoing operations, an additional week and reduced interest expenses. These were partly negated by divestiture impacts and adverse changes in other expenses/(income).
The Kraft Heinz Company Price, Consensus and EPS Surprise
The company generated net sales of $7,381 million, up 10% year over year. Net sales included an adverse impact of 4.6 percentage points from divestitures net of acquisitions and an unfavorable currency impact of 2.9 percentage points. Net sales beat the Zacks Consensus Estimate of $7,178 million.
Organic net sales increased 10.4% year over year. KHC stated that pricing rose 15.2 percentage points year over year, reflecting growth in both segments. The upside can be attributed to measures undertaken to counter increasing input costs. The volume/mix fell 4.8 percentage points due to supply restrictions and the elasticity effect of pricing actions.
The gross profit of $2,364 million jumped by 9.3% from the figure reported in the year-ago quarter. Adjusted EBITDA advanced 8.6% to $1,743 million due to elevated pricing and efficiency gains, which compensated for supply-chain costs, increased commodity costs and an adverse volume/mix.
Escalated commodity costs included high costs across dairy, soybean, packaging materials and vegetable oils. Supply-chain costs included inflation across logistics, procurement and manufacturing costs.
Segment Discussion
North America: Net sales of $5,684 million increased 9.1% year over year. During the quarter, pricing moved up 14.2 percentage points, but the volume/mix fell 5 percentage points.
International: Net sales of $1,697 million were up 13.1% year over year. Pricing moved up 18.5 percentage points, but the volume/mix slipped 4.2 percentage points.
Other Financial Aspects
Kraft Heinz ended the quarter with cash and cash equivalents of $1,040 million, long-term debt of $19,233 million and total shareholders’ equity of $48,678 million. Net cash provided by operating activities was $2,469 million for the full-year 2022. The company generated free cash flow of $1,553 million during this time.
In a separate press release, Kraft Heinz declared a quarterly dividend of 40 cents per share, payable on Mar 31, 2023, to shareholders of record as of Mar 10.
Guidance
Kraft Heinz ended 2022 on a solid note and remains well-placed for 2023. The company continues to witness strength due to its core growth pillars while simultaneously focusing on brand-enhancing investments.
For the full-year 2023, management expects organic net sales growth of 4-6%. Adjusted EBITDA is expected to increase 2-4% in 2023 on a constant currency or cc basis. Excluding the impact of the 53rd week, it is likely to rise 4-6%.
Management expects adjusted gross margin recovery due to pricing and gross efficiencies. However, it expects high-single-digit inflation in 2023.
Adjusted earnings per share (EPS) for the year are envisioned in the band of $2.67-$2.75, which includes a nearly 4-cent expected impact of adverse changes in non-cash pension and post-retirement benefits and a 4-cent impact of currency woes.
This Zacks Rank #3 (Hold) stock has increased 5.8% in the past three months against the industry’s 1% decline.
Conagra, a consumer-packaged goods food company, currently sports a Zacks Rank #1 (Strong Buy). CAG has a trailing four-quarter earnings surprise of 8.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra’s current fiscal-year sales and earnings suggests growth of 6.8% and 11.9%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, which is a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and EPS suggests an increase of 19.5% and 89.9%, respectively, from the year-ago reported number.
Post Holdings, which operates as a consumer-packaged goods company, currently has a Zacks Rank #2 (Buy). POST has a trailing four-quarter earnings surprise of 9.6%, on average.
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year EPS suggests an increase of 70.8% from the year-ago reported number.
(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)
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Kraft Heinz (KHC) Q4 Earnings & Sales Top Estimates, Rise Y/Y (Revised)
The Kraft Heinz Company (KHC - Free Report) posted robust fourth-quarter 2022 results, wherein the top and bottom lines increased year over year and surpassed the Zacks Consensus Estimate. The company performed strongly, even amid a tough operating landscape marked by inflation and supply-chain bottlenecks, which is worth noting.
Quarter in Detail
Kraft Heinz posted adjusted earnings of 85 cents a share, beating the Zacks Consensus Estimate of 77 cents. Quarterly earnings jumped 7.6% year over year, mainly due to the performance of ongoing operations, an additional week and reduced interest expenses. These were partly negated by divestiture impacts and adverse changes in other expenses/(income).
The Kraft Heinz Company Price, Consensus and EPS Surprise
The Kraft Heinz Company price-consensus-eps-surprise-chart | The Kraft Heinz Company Quote
The company generated net sales of $7,381 million, up 10% year over year. Net sales included an adverse impact of 4.6 percentage points from divestitures net of acquisitions and an unfavorable currency impact of 2.9 percentage points. Net sales beat the Zacks Consensus Estimate of $7,178 million.
Organic net sales increased 10.4% year over year. KHC stated that pricing rose 15.2 percentage points year over year, reflecting growth in both segments. The upside can be attributed to measures undertaken to counter increasing input costs. The volume/mix fell 4.8 percentage points due to supply restrictions and the elasticity effect of pricing actions.
The gross profit of $2,364 million jumped by 9.3% from the figure reported in the year-ago quarter. Adjusted EBITDA advanced 8.6% to $1,743 million due to elevated pricing and efficiency gains, which compensated for supply-chain costs, increased commodity costs and an adverse volume/mix.
Escalated commodity costs included high costs across dairy, soybean, packaging materials and vegetable oils. Supply-chain costs included inflation across logistics, procurement and manufacturing costs.
Segment Discussion
North America: Net sales of $5,684 million increased 9.1% year over year. During the quarter, pricing moved up 14.2 percentage points, but the volume/mix fell 5 percentage points.
International: Net sales of $1,697 million were up 13.1% year over year. Pricing moved up 18.5 percentage points, but the volume/mix slipped 4.2 percentage points.
Other Financial Aspects
Kraft Heinz ended the quarter with cash and cash equivalents of $1,040 million, long-term debt of $19,233 million and total shareholders’ equity of $48,678 million. Net cash provided by operating activities was $2,469 million for the full-year 2022. The company generated free cash flow of $1,553 million during this time.
In a separate press release, Kraft Heinz declared a quarterly dividend of 40 cents per share, payable on Mar 31, 2023, to shareholders of record as of Mar 10.
Guidance
Kraft Heinz ended 2022 on a solid note and remains well-placed for 2023. The company continues to witness strength due to its core growth pillars while simultaneously focusing on brand-enhancing investments.
For the full-year 2023, management expects organic net sales growth of 4-6%. Adjusted EBITDA is expected to increase 2-4% in 2023 on a constant currency or cc basis. Excluding the impact of the 53rd week, it is likely to rise 4-6%.
Management expects adjusted gross margin recovery due to pricing and gross efficiencies. However, it expects high-single-digit inflation in 2023.
Adjusted earnings per share (EPS) for the year are envisioned in the band of $2.67-$2.75, which includes a nearly 4-cent expected impact of adverse changes in non-cash pension and post-retirement benefits and a 4-cent impact of currency woes.
This Zacks Rank #3 (Hold) stock has increased 5.8% in the past three months against the industry’s 1% decline.
Consumer Staple Stocks Worth a Look
Some better-ranked consumer staple stocks are Conagra Brands (CAG - Free Report) , Lamb Weston (LW - Free Report) and Post Holdings (POST - Free Report) .
Conagra, a consumer-packaged goods food company, currently sports a Zacks Rank #1 (Strong Buy). CAG has a trailing four-quarter earnings surprise of 8.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra’s current fiscal-year sales and earnings suggests growth of 6.8% and 11.9%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, which is a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and EPS suggests an increase of 19.5% and 89.9%, respectively, from the year-ago reported number.
Post Holdings, which operates as a consumer-packaged goods company, currently has a Zacks Rank #2 (Buy). POST has a trailing four-quarter earnings surprise of 9.6%, on average.
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year EPS suggests an increase of 70.8% from the year-ago reported number.
(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)