Kraft Heinz lifts annual profit target as price hikes boost margin
(Reuters) — Kraft Heinz (NASDAQ:KHC) beat Wall Street estimates for third-quarter profit and raised its annual forecast as the Jell-O maker's margins benefited from higher prices of its packaged meals and condiments.
Its shares edged up 1% to $31.7 in premarket trading.
Packaged food makers from Kellogg (NYSE:K) and Coca-Cola (NYSE:KO) Co to General Mills (NYSE:GIS) have hiked product prices over the last several quarters to offset the impact of steep supply-chain costs.
Kraft's prices increased by 7.1 percentage points for the quarter, boosting its adjusted gross margin by 396 basis points to 34%.
However, the higher prices took a toll on demand from inflation-hit customers, sending Kraft's overall volumes down 5.4 percentage points even as organic net sales grew 1.7%.
It logged adjusted earnings of 72 cents per share for the quarter ended Sept. 30, above analysts' estimates of 63 cents, according to LSEG data.
The Philadelphia Cream Cheese maker forecast full-year adjusted profit in the range of $2.91 to $2.99 per share, compared with its previous range of $2.83 to $2.91.
Quarterly net sales rose to $6.57 billion, missing expectations of $6.72 billion.
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