Kraft Heinz tops estimates with higher pricing

NEW YORK: Kraft Heinz Co topped quarterly profit and revenue estimates on Friday as the Tater Tots maker raised product prices and posted higher-than-expected sales from the United States for the first time in several quarters. Shares in the Chicago-based company rose as much as 9.4 per cent, the stock’s biggest percentage gain in 18 months.
Many packaged food companies have been forced to nudge prices up in recent months to combat skyrocketing commodities and transportation costs. Prices had long been suppressed by fierce competition between retailers and changing consumer eating habits.
Kraft Heinz, which also makes Philadelphia cream cheese and Planters peanuts, said it had raised prices everywhere but Europe, the Middle East and Africa.
The company still expects second-half organic sales to be higher than in the first half of the year, but warned that earnings would now be evenly split across both halves due to spending on commercial investments and persistently higher input costs.
“Mainly at freight and transportation, packaging, both resins and cardboard as well as tariff risk currently impacting foil and aluminium costs in the US and certain products we sell in Canada,” Chief Financial Officer David Knopf told analysts on a call. The company does still expect constant currency adjusted core earnings to improve by year-end and gain momentum into 2019, he added. — Reuters