Vending

Kraft Heinz suffers Q4 2021 losses, posts FY earnings gain

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February 16, 2022

Kraft Heinz reported quarterly sales and earnings losses for Q4 2021 ending Dec. 25, 2021 compared to Q4 2020, while full year results included a significant earnings gain over fiscal 2020, according to an earnings release.

• Net sales decreased 3.3% from $6.9 billion to $6.71 billion for the comparable quarters, including a negative 7.3 percentage point impact from acquisitions and divestitures and a favorable 0.1 percentage point impact from currency.
• Net sales versus the comparable 2019 period increased 2.6%, including a favorable 0.2 percentage point impact from currency and despite a negative 7 percentage point impact from acquisitions and divestitures.
• Net income decreased from $1.03 billion to a loss of $255 million in the comparable quarters, primarily driven by non-cash impairment losses of $1.3 billion, largely due to the impairment of the Kraft brand following the closing of the cheese transaction, higher interest expense due to one-time debt extinguishment costs, lower adjusted EBITDA, as well as unrealized losses on commodity hedges in the current year period compared to unrealized gains on commodity hedges in the prior year period.
• Diluted and basic earnings per share decreased 125% from 84 cents to a loss of 21 cents, driven by the net loss factors discussed above.
• Adjusted EPS decreased 1.3% from 80 cents to 79 cents, primarily driven by lower adjusted EBITDA that more than offset lower taxes on adjusted earnings, lower interest expense and favorable changes in other expense and income versus the prior year period.
• For the 2021 full year, sales fell 0.5% from $26.18 billion to $26.04 billion.
• However, full year net income jumped 183.7% from $361 million to $1.024 billion, while diluted EPS rose 182% from 29 cents to 82 cents and adjusted EPS increased 1.7% from $2.88 to $2.93.

Shares traded today at $36.06 against a 52-week range of $32.79-$44.95.

The $6.71 billion in quarterly revenue beat analyst expectations by $80 million, while the non-GAAP EPS of 79 cents beat expectations by 16 cents, according to Seeking Alpha.

"Our strategic transformation has powered another year of outstanding performance," CEO Miguel Patricio said in the press release. "Our achievements are proof that our scale and agility have led to better results and greater relevance with customers and consumers. We are generating efficiencies to fuel incremental investments in our business, which, along with successful pricing, are mitigating inflationary pressures."

The company currently expects a low-single-digit percentage increase in 2022 organic net sales versus the prior year period, reflecting continued stronger consumption versus pre-pandemic levels. Adjusted EBITDA is expected to be in the range of $5.8 billion to $6 billion, reflecting a 53rd week in 2022, the impact of divestitures versus the prior year, strong organic net sales as well as the company's ongoing efforts to manage inflationary pressures.