Kraft got a boost from the pandemic.
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Kraft Heinz stock was heading higher on Thursday after the packaged food maker delivered a better-than-expected first quarter.
Shares of Kraft (ticker: KHC) were up 2.6% to $41.16 in midday trading. The stock has gained 18.7% year to date and 35.7% in the past 12 months.
Kraft said it earned $563 million, or 46 cents a share, up from 31 cents a share in the year-ago period. Adjusted earnings, which strip out nonrecurring items, were 72 cents a share. Revenue rose 3.9% to $6.39 billion. Analysts were looking for EPS of 60 cents on revenue of $6.25 billion.
Kraft’s organic sales climbed 2.5% and were up 8.7% compared to the first quarter of 2019, before the pandemic. For the current second quarter, the company expects a mid-single digit percentage increase in organic sales.
Kraft and other packaged food companies got a boost from the pandemic, and Barron’s argues that they still have room to run. Kraft’s quarter stands in contrast to other recent reports from consumer products companies, like Procter & Gamble (PG) and Kimberly-Clark (KMB), which fell after earnings, in part on higher input costs.
Earlier this week, peer Mondelez International (MDLZ) told Barron’s that it too is seeing higher commodity costs for its food products, but that the increases are manageable. Kraft said pricing was up 1.5 percentage points year over year in the quarter; analysts have been wary of what higher input costs could mean for the company, especially after the stock has rallied.
Kraft also rose after its previous earnings report, in February, which also included news of the sale of its nut business. The company has been divesting its noncore assets as part of its turnaround, which began to boost earnings in the first quarter of 2020.
Write to Teresa Rivas at [email protected]
