Shares of The Kraft Heinz Company (NASDAQ:KHC), one of the world's largest food and beverage companies with a list of iconic brands, popped nearly 13% Thursday morning after a strong earnings beat gave investors reason to be optimistic.
Net sales declined 4.8% from to the prior year, to $6.08 billion, below analysts' estimates of $6.13 billion. The sales decline was slightly offset by a 1% increase in pricing; when you exclude currency changes, acquisitions and divestitures, organic sales were down a more modest 1.1%. Adjusted earnings per share checked in at $0.69, easily topping analysts' estimates calling for $0.54 per share. "While our third-quarter results remain below our potential, we showed sequential improvement versus the first half, and I believe we are beginning to operate the business better," said Kraft Heinz CEO Miguel Patricio, in a press release.
Investors have witnessed the stock shed 42% of its value over the past year -- and that includes today's pop. It's been a rough year for Kraft, as the company slashed its dividend and booked billions of dollars in writedowns on some of its popular brands. And there are plenty of intriguing consumer stocks out there among its rivals. So though it missed sales estimates, Kraft's third-quarter earnings beat was a welcome development for shareholders.
Patricio will unveil a detailed strategy for Kraft Heinz in 2020, but in the near term, management plans to increase marketing and advertising for its top brands in an attempt to grow sales. Kraft still has plenty of work to do with its overall turnaround, but the third quarter shows the company is making some progress.