Coronavirus-related food stockpiling boosts Kraft Heinz
Full-year impact of coronavirus on the company remains uncertain
LONDON (Reuters) - U.S. food producer Kraft Heinz Co reported higher-than-expected quarterly sales and profit on Thursday, helped by coronavirus-related stockpiling.
The maker of Heinz ketchup, Kraft Macaroni & Cheese and Oscar Mayer lunch meat said first-quarter sales were $6.16 billion, slightly ahead of analysts' average estimate of $6.14 billion, according to IBES data from Refinitiv. Excluding hits from currency fluctuations and divestitures, organic sales rose 6.2 percent, in line with a forecast the company gave earlier this month.
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It warned then that the full benefit from the incremental sales lift would not fall to the bottom line, due to costs related to meeting the higher demand.
About 6 to 7 percentage points of sales growth were due to increased consumer demand related to the COVID-19 pandemic, as shoppers stocked up on pantry staples.
This photo illustration shows packs of Kraft's macaroni and cheese in Washington on April 21, 2015. (Photo: NICHOLAS KAMM/AFP via Getty Images)
First-quarter net income fell to $378 million, or 31 cents per share, from $405 million, or 33 cents per share, a year earlier. Excluding items, adjusted earnings were 58 cents per share, topping analysts’ average estimate of 55 cents.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KHC | THE KRAFT HEINZ CO. | 31.09 | +0.21 | +0.68% |
Looking forward, the company forecast low to mid-single-digit organic net sales growth and mid-single-digit constant-currency adjusted EBITDA growth for the current second quarter. It said that outlook reflected incremental demand from retail customers due to increased at-home consumption, particularly in developed markets, and reduced demand in foodservice channels globally.
"The impact of the COVID-19 pandemic on the company's full-year 2020 results remains uncertain," the company said.