When Kraft Heinz Co. (NASDAQ: KHC | KHC Price Prediction) reported its most recent quarterly results before the markets opened on Thursday, the company posted $0.58 in earnings per share (EPS) and $6.16 billion in revenue. The consensus estimates for the first quarter had called for $0.55 in EPS and $6.14 billion in revenue, and it the same period of last year, the packaged foods giant said it had EPS of $0.66 on $5.96 billion in revenue.
During the most recent quarter, organic net sales increased 6.2% from the year-ago period, due to approximately six to seven percentage points of growth as a result of increased consumer demand related to the COVID-19 pandemic. Pricing increased 1.6% from the prior year, as higher pricing in the United States and International segments more than offset lower pricing in Canada.
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In terms of its segments, the company reported as follows:
- United States net sales increased 6.4% year over year to $4.50 billion.
- International net sales increased by 1.3% to $1.3 billion.
- Canada net sales declined by 19.8% to $361 million.
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Management noted in the report that the impact of the COVID-19 pandemic on the full-year 2020 results remains uncertain. In each of the company’s reporting segments, the second quarter 2020 outlook reflects, to varying degrees, incremental demand from retail customers due to an increase in at-home consumption, particularly in developed markets, as well as reduced demand in foodservice channels on a global basis. Currently, Kraft Heinz believes low- to mid-single-digit organic net sales growth and mid-single-digit constant-currency adjusted EBITDA growth versus the prior year period is a reasonable expectation for second-quarter performance. The consensus estimates are $0.64 in EPS and $6.45 billion in revenue for the second quarter.
Miguel Patricio, Kraft Heinz CEO, commented:
Our first quarter results reflect how strongly our employees have responded to the global COVID-19 challenge and the exceptional level of service our teams have demonstrated during this critical time; and for that, it is an incredible privilege to be part of the Kraft Heinz Company. The transformation work we kicked off last year, together with the flexibility, agility, and creativity of our people, and the tremendous collaboration with our retail customers, are all coming together. Going forward, we have a singular focus: to meet the demand for our products and ensure consumers have the food and nourishment they need during these uncertain times.
Kraft Heinz stock was relatively flat at $30.52 on Thursday, in a 52-week range of $19.99 to $33.43. The consensus price target is $28.50.
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