Kraft Heinz Q1 2023 Earnings Report
Key Takeaways
Kraft Heinz reported a 7.3% increase in net sales and a 9.4% increase in Organic Net Sales. Net income increased by 7.1% to $837 million, and Adjusted EBITDA increased by 10.3% to $1.5 billion. Diluted EPS was $0.68, up 7.9%, and Adjusted EPS was $0.68, up 13.3%. The company raised its full-year outlook for Constant Currency Adjusted EBITDA and Adjusted EPS while reaffirming its outlook for Organic Net Sales.
Net sales increased 7.3%; Organic Net Sales increased 9.4%.
Gross profit margin increased 62 basis points to 32.6%; Adjusted Gross Profit Margin increased 126 basis points to 32.8%.
Net income increased 7.1%; Adjusted EBITDA increased 10.3%.
Diluted EPS was $0.68, up 7.9%; Adjusted EPS was $0.68, up 13.3%.
Kraft Heinz
Kraft Heinz
Forward Guidance
The Company reaffirms its expectation of 2023 Organic Net Sales growth of 4 to 6 percent versus 2022. The Company is raising 2023 Constant Currency Adjusted EBITDA guidance to growth of 4 to 6 percent versus 2022, or 6 to 8 percent when excluding the impact from lapping the 53rd week in 2022. The Company is raising 2023 Adjusted EPS guidance to be in the range of $2.83 to $2.91.
Positive Outlook
- Expects 2023 Organic Net Sales growth of 4 to 6 percent versus 2022.
- Raising 2023 Constant Currency Adjusted EBITDA guidance to growth of 4 to 6 percent versus 2022, or 6 to 8 percent when excluding the impact from lapping the 53rd week in 2022.
- Pricing and gross efficiencies continuing to contribute to Adjusted Gross Profit Margin recovery.
- 2023 Adjusted Gross Profit Margin is now expected to expand 125 to 175 basis points versus prior year.
- Raising 2023 Adjusted EPS guidance to be in the range of $2.83 to $2.91.
Challenges Ahead
- Anticipates high single-digit inflation for the year, reflecting low double-digit inflation in the first half of the year and mid-single-digit inflation in the second half of the year.
- Includes a negative impact of approximately $0.04 from expected unfavorable changes in non-cash pension and post-retirement benefits.
- Includes a currency headwind of approximately $0.02 at current foreign exchange rates.
- The expected 2023 year-over-year Adjusted EPS reflects a negative $0.06 impact from lapping a 53rd week in 2022.
- Now expects an effective tax rate on Adjusted EPS to be in the range of 19 to 21 percent.