Kraft Heinz posted second-quarter adjusted earnings that beat Wall Street expectations.
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Kraft Heinz shares were a touch higher in premarket trading after the packaged-food maker posted higher second-quarter adjusted earnings than analysts expected and raised its full-year outlook for organic net sales.
Kraft (ticker: KHC) reported adjusted earnings for its second quarter of 70 cents a share, greater than analysts’ estimates of 68 cents, but lower than the 78 cents from the same period last year, according to FactSet. Net sales were $6.55 billion, which beat Wall Street expectations of $6.39 billion, but was down from the $6.62 billion a year earlier.
Kraft raised its forecast for 2022 growth in organic net sales, saying it now expexts a percentage increase in the high single digits, compared with the mid-single-digit gain it had anticipated.
“Though the environment remains fluid, we are better able to anticipate dynamic conditions, adapt to this constantly changing environment, and demonstrate our resiliency against new challenges,” Chief Executive Miguel Patricio said in the company’s earnings release. “We are anticipating and adapting to changing market conditions while managing inflation through pricing realization and gross efficiencies.”
Shares of Kraft were up 0.1% early Wednesday to $38.68.
Kraft Heinz ’s green ketchup didn’t last, but in a year when so many stocks are in the red, the packaged-food maker has proven resilient. Like many food stocks, the shares have held up better than the broader market because investors see them as a haven, at least relative to the carnage elsewhere. Coming into Wednesday trading, the shares are up more than 7% so far this year, while the S&P 500 has fallen by almost 18%.
Kraft’s results come at a time when consumers’ spending power is looking increasingly strained by inflation. Given that Walmart (WMT) cut its financial forecasts this week, and generalized worries that Americans are trading down to save money, Kraft faces questions about whether customers are staying loyal to its brands.
Other food companies have so far put up strong results, including PepsiCo (PEP) and Coca-Cola (KO), although the picture is more clouded elsewhere in staples.
Although Kraft stock has been gaining some bulls, most analysts aren’t particularly eager to recommend the shares. Just five of the 22 analysts tracked by FactSet rate Kraft at Buy or the equivalent, while nearly two-thirds remain sidelined. The average price target among analysts is $42.97.
Write to Teresa Rivas at [email protected]
