Vending

Kraft Heinz lifts Q1 2022 earnings, adjusts outlook

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April 27, 2022

The Kraft Heinz Co. improved its earning on a sales decline for Q1 2022 and raised its full year outlook, according to an earnings report. Highlights include:

• Net sales decreased 5.5% from $6.4 billion in Q1 2021 to $6.05 billion in the quarter ending March 26, 2022, including a negative 11.2% impact from divestitures net of acquisitions and a negative 1.1% impact from currency.
• Organic net sales increased 6.8% versus the prior year period. Pricing was up 9% versus the prior year period with growth across each reporting segment that was primarily driven by increases to mitigate rising input costs in retail and foodservice channels.
• Volume/mix declined 2.2% versus the year-ago period reflecting supply constraints that were partially offset by strong demand for products in retail and a continued recovery in foodservice channels.
• Net income increased 37.5% from $568 million to $781 million in the comparative quarters primarily driven by lower non-cash impairment losses in the current year period, lower interest expense primarily due to debt extinguishment costs in the prior year period and favorable changes in other expenses.
• Diluted earnings per share rose 37% from 46 cents to 63 cents in the comparative quarters, driven by the factors discussed above.
• Adjusted EPS fell 16.7% from 72 cents to 60 cents, primarily driven by lower adjusted EBITDA, including a negative 8-cent impact from divestitures and higher taxes on adjusted earnings that more than offset lower interest expense versus the prior year period.

Shares traded today at $42.90 against a 52-week range of $32.79-$44.95.

The $6.05 quarterly revenue surpassed analyst expectations by $240 million while the non-GAAP EPS of 60 cents beat expectations by 7 cents, according to Seeking Alpha.

The company declared a 40-cent dividend, in line with expectations, payable June 24 for shareholders of record May 27.

"Our first quarter was a strong start to the year and yet another period where our team rose to mitigate new and different macro environment challenges," CEO Miguel Patricio said in the press release. "We still have work to do, more opportunity ahead, and we remain confident in our ability to deliver our plan for the year as well as our long-term growth strategy."

The company continues to expect strong financial performance in 2022 and is raising expectations for organic net sales to a mid-single-digit percentage increase versus the prior year period, reflecting strong performance to date, ongoing business momentum and additional pricing actions to mitigate inflation.