Vending

Kraft Heinz Q4 2020 sales and earnings rise, surpass expectations

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February 11, 2021

Net sales for the Kraft Heinz Co. increased 6.2% from $6.5 billion from last year's fourth quarter to $6.9 billion for the quarter ending Dec. 26, 2020, including a favorable 0.2 percentage point impact from currency, according to a press release.

Net sales were $26.185 billion for 2020 versus $24.977 billion for 2019.

Shares traded at $35.80 today against a 52-week range of $19.35-$36.16.

Organic net sales increased 6% driven by sustained growth momentum in retail, partially offset by ongoing weakness in foodservice and a negative 1.4% impact from exiting the McCafé licensing agreement. Pricing increased 4.8% reflecting favorable trade expense timing versus the year-ago period, lower sales on promotion during holiday event periods relative to comparable prior year, primarily in the United States, as well as reduced promotional activity in capacity-constrained areas to better safeguard customer service.

The revenue beat expectations by $110 million, according to Seeking Alpha, while both the GAAP EPS of 84 cents and the non-GAAP EPS of 80 cents beat expectations by 6 cents,

The company declared a 40 cents per share quarterly dividend payable March 26 for shareholders of record March 12.

Volume/mix was up 1.2% versus the year-ago period from continued at-home consumption growth due, in part, to the COVID-19 pandemic. This growth was partially offset by foodservice declines, the negative impact from exiting the McCafé licensing agreement, and unfavorable changes in retail inventory levels.

Net income attributable to common shareholders increased 467.5% from $182 million in last year's quarter to $1.03 billion in the 2020 fourth quarter. and diluted EPS increased to 84 cents, up 460% over the 15 cents for the prior year quarter primarily due to non-cash impairment charges in the prior year period that did not repeat and, to a lesser extent, gross profit growth versus the year-ago period.

Adjusted EPS increased to 80 cents up 11.1% versus the prior year, primarily driven by adjusted EBITDA growth that more than offset an unfavorable, non-cash impact from lower amortization of prior service credits within other expense/(income) and higher stock-based compensation expenses versus the year-ago period, as well as higher taxes on adjusted earnings in the current period.

"We have started the new year with our new operating model fully in place," CEO Miguel Patricio said in the release. "We have momentum at our back. We are well-prepared to meet the uncertainties of this dynamic environment, as well as the challenges facing the consumers we serve."

Based on performance to date, the company believes flat-to-positive growth in organic net sales and low-single-digit constant currency adjusted EBITDA growth versus the prior year period are reasonable expectations for first-quarter 2021 performance.

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