Why Food Company Kraft Heinz's Shares Are Shooting Higher Today

Kraft Heinz Company KHC shares are trading higher after it reported mixed third-quarter FY23 results and raised its full-year EPS outlook.

KHC reported third-quarter sales growth of 1% year-on-year to $6.57 billion, missing the analyst consensus estimate of $6.715 billion.

Sales in North America declined 0.4% Y/Y, and International climbed 5.7%.

Gross profit increased by 21.2% Y/Y to $2.24 billion, with the margin expanding 568 points to 34%.

Operating margin for the quarter was 10%, and the operating income decreased 13% to $653 million.

Adjusted EBITDA rose 11.9% to $1.6 billion. Adjusted EPS of $0.72 beat the consensus estimate of $0.66.

Kraft Heinz held $1.05 billion in cash and equivalents as of Sept. 30, 2023. Operating cash flow for year-to-date totaled $2.6 billion.

The Board of Directors declared a regular quarterly dividend of $0.40 per share of common stock payable on Dec. 29, 2023, to stockholders of record as of Dec. 1, 2023.

"Our third quarter results were marked by net sales growth across each of our three core pillars: Foodservice, Emerging Markets, and U.S. Retail Grow Platforms," said CEO and board chair Miguel Patricio.

Outlook: Kraft Heinz sees FY23 organic net sales growth of 4-6% versus the prior year, closer to the lower end of the range at approximately 4%.

KHC expects FY23 adjusted EPS of $2.91 - $2.99 versus the consensus of $2.73 ($2.83 - $2.91 prior).

The company also revealed several leadership and organizational changes as part of its mission to accelerate profitable growth.

Price Action: KHC shares are trading higher by 3.58% at $32.58 on the last check Wednesday.