As the manufacturer of Jell-O saw its margins increase due to higher prices for its packed meals and sauces, Kraft Heinz (KHC.O.) exceeded Wall Street projections for third-quarter earnings and increased its yearly outlook.
Premarket trade saw a 1% increase in shares, reaching $31.7. To counteract the impact of steep supply-chain expenses, packaged food manufacturers, including Kellogg (K.N.), Coca-Cola Co. (KO.N.), and General Mills (GIS.N.), have increased product prices during the previous several quarters.
Kraft’s adjusted gross margin grew by 396 basis points to 34% during the quarter due to a 7.1 percentage point rise in pricing.
Despite the 1.7% growth in organic net sales, Kraft’s total volumes decreased by 5.4 percentage points due to the impact of increased pricing on consumers, who are affected by inflation.
LSEG data shows that for the quarter that concluded on September 30, it reported adjusted earnings of 72 cents per share, which is above analysts’ projections of 63 cents.
The manufacturer of Philadelphia Cream Cheese revised its full-year adjusted profit projection from $2.83 to $2.91 per share to $2.91 to $2.99 per share.
Although they were expected to be $6.72 billion, quarterly net sales increased to $6.57 billion.
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