Kraft Heinz Beats On Q2 Earnings, But Revenue Misses On US Market Share Headwinds

Kraft Heinz Company KHC reported second-quarter FY23 sales growth of 2.6%, year-on-year, to $6.72 billion, missing the analyst consensus of $6.81 billion.

Sales in North America rose 0.8% Y/Y, and International climbed 8.5%.

Gross profit increased by 14% Y/Y to $2.26 billion, with the margin expanding 337 points to 33.6%.

Operating margin for the quarter was 20.5%, and the operating income increased 154.4% to $1.37 billion.

Adjusted EBITDA rose 6% to $1.6 billion. Adjusted EPS of $0.79 beat the analyst consensus of $0.74.

Kraft Heinz held $947 million in cash and equivalents as of July 1, 2023. Operating cash flow for the six months totaled $1.58 billion.

The company's Board of Directors declared a quarterly dividend of $0.40 per share, payable on September 29, 2023, to stockholders of record as of September 1, 2023.

"While we did face headwinds in the second quarter, particularly within U.S. market share performance, the action plans we laid out in the first quarter resulted in share trend improvement each month... As a result, we are reiterating our full-year outlook," said CEO and Board Chair Miguel Patricio.

Outlook, reiterated: Kraft Heinz sees 2023 organic net sales growth of 4-6% versus 2022.

KHC expects FY23 adjusted EPS of $2.83 - $2.91 versus the consensus of $2.89.

Price Action: KHC shares are trading lower by 0.61% at $35.66 in premarket on the last check Wednesday.