Kraft Heinz (KHC -0.65%), the food and condiment behemoth, unveiled its fiscal first-quarter results on May 1, showcasing a performance that met market predictions in some areas while falling short in others. Significantly, its adjusted earnings per share (EPS) of $0.69 matched analysts' consensus forecast. However, its revenue of $6.41 billion slightly lagged behind the anticipated $6.43 billion, hinting at potential growth challenges in a fiercely competitive sector.
| Metric | Q1 2024 | Q1 2024 Analyst Estimate | Q1 2023 | % Change |
|---|---|---|---|---|
| Revenue | $6.41 billion | $6.43 billion | $6.49 billion | (1.2%) |
| Adjusted EPS | 0.69 | 0.69 | 0.68 | 1.5% |
| Net income | $804 million | N/A | $837 million | (3.9%) |
| Gross profit | $2.24 billion | N/A | $2.11 billion | 6.2% |
Kraft Heinz at a glance
Kraft Heinz stands as a dominant force in the global food and beverage sector, renowned for its vast array of top-selling products and iconic brands like Kraft, Oscar Mayer, and Heinz. With its operations sprawling across various continents, the company prides itself on its ability to innovate and adapt in a fast-evolving marketplace.
Its recent strategic focuses have been on enhancing brand strength, propelling global sales distribution, and ramping up innovation, underpinned by effective supply chain management.
Quarterly performance highlights
In the quarter, which ended March 30, Kraft Heinz delivered mixed segment performances. While organic net sales in its North America and international developed markets segments declined by 1.2% and 1.3%, respectively, its emerging markets segment recorded promising 5.5% growth. The organic net sales metric factors out the impacts of foreign currency exchange rate fluctuations -- particularly important when dealing with overseas markets and emerging economies -- as well as acquisitions and divestitures. On a net sales basis, results were down across all three segments.
Despite a favorable gross profit uptick of 6.2%, net sales dipped by 1.2% in comparison to the prior year, primarily due to volume/mix decline. Such outcomes reflect the challenges involved in balancing pricing strategies with efforts to maintain sales volumes in competitive environments.
The company maintained its dividend payout at $0.40 per share, where it has been since 2019, supporting investors' expectations for steady returns.
Looking forward
Looking ahead, management offered a cautious outlook for 2024, with guidance for organic net sales growth of up to 2% and adjusted EPS growth in the range of 1% to 3%.
