Sector News

Kraft Heinz beats expectations as consumers continue to dine at home

May 2, 2021
Food & Drink

Kraft Heinz has beaten first-quarter net sales estimates with 3.9% growth, as it sustains household penetration for its packaged goods despite a significantly good Q1 in 2020.

The owner of Philadelphia cream cheese and Heinz Ketchup had predicted flat-to-positive organic net sales growth, but today it reported 2.5% organic growth for the quarter.

“Our first quarter was better than expected, with our team delivering strong results on top of exceptional growth last year,” said Kraft Heinz CEO, Miguel Patricio.

In the first three months of 2021, net sales stood at $6.39 billion compared to $6.16 billion last year. Consumption remained strong and the company saw driving share growth across more categories.

Kraft Heinz says it witnessed a strong performance across all business segments, following continued resilience in developed markets’ retail consumption and continued growth in emerging markets.

In the US, net sales grew by 2.5% to $4.61 billion. Kraft Heinz’ International segment recorded net sales of $1.39 billion, representing 7.2% growth; while Canada’s sales rose 8.8% to $392 million.

Growth was partially offset by ongoing declines in foodservice and lower retail takeaway. Operating income for the quarter increased 41.3% to $1.09 billion compared to $770 million last year, driven by strong gross profit growth and lower general corporate expenses than last year.

“Looking forward, we will continue to focus on leveraging our tremendous scale by investing to improve our capabilities and overall agility. As we do, we believe we will come out of this period much stronger, operationally and financially, than we entered,” added Patricio.

For Q2, Kraft Heinz expects a mid-single-digit percentage increase in organic net sales, versus the 2019 period – which it views as more meaningful given the exceptional, Covid-19 related consumer demand changes last year. Therefore, this is equivalent to a low-single-digit percentage decline compared to 2020.

By Emma Upshall

Source: foodbev.com

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