Kraft Heinz Q3 Results: Earnings Beat, Revenue Dips, Sees 'Elongated Recovery' Across US Retail Business

Kraft Heinz posts Q3 earnings of 75 cents per share, beating estimates, but reports a revenue decline and anticipates a prolonged recovery in U.S. retail.

The Kraft Heinz Company KHC shares are trading lower on Wednesday.

The company reported adjusted earnings per share of 75 cents, beating the analyst consensus estimate of 74 cents. Quarterly revenues of $6.383 billion (down 2.8%) missed the street view of $6.417 billion.

The adjusted gross profit margin rose by 30 basis points to 34.3%.

“In the third quarter, our top-line performance across two of our strategic pillars, Global Away From Home and Emerging Markets, grew in line with our expectations,” said Kraft Heinz CEO Carlos Abrams-Rivera.

Operating income fell by 115.5%, primarily due to non-cash impairment losses of $1.4 billion, while adjusted operating income increased by 1.4%.

“As we look forward, we are expecting continued momentum in these two pillars. When we look at our U.S. Retail business, we are expecting more of an elongated recovery, driven by specific categories that continue to experience pressure,” the CEO added.

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Year to date, the company paid $1.5 billion in cash dividends and repurchased $538 million of common stock. As of September 28, the company was authorized to repurchase approximately $2.4 billion of common stock under the publicly announced share repurchase program.

The company declared a regular quarterly dividend of $0.40 per share of common stock on December 27.

Outlook: Kraft Heinz now expects fiscal year 2024 adjusted EPS growth to be at the low end of the previous guidance range of 1% to 3%, or in the range of $3.01 – $3.07, versus the $3.02 estimate.

Organic net sales are expected to be at the lower end of the previous guidance, declining 2% to flat compared to the prior year.

Adjusted operating income growth is also projected to be at the low end of the prior guidance range of 1% to 3% year-over-year. This outlook includes anticipated adjusted gross profit margin expansion at the lower end of the previous range of 75-125 basis points compared to the prior year.

Price Action: KHC shares are trading lower by 3.59% to $33.55 at last check Wednesday.

Image via Kraft Heinz

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