Kraft Heinz Q2 2024 Earnings Report
Key Takeaways
Kraft Heinz reported a decrease in net sales by 3.6% and organic net sales by 2.4%. However, the company saw an increase in gross profit margin by 180 basis points and adjusted operating income by 2.0%. Diluted EPS decreased significantly, while adjusted EPS saw a slight decrease.
Net sales decreased by 3.6%, with organic net sales down by 2.4%.
Gross profit margin increased by 180 basis points to 35.4%.
Operating income decreased significantly by 62.1%, while adjusted operating income increased by 2.0%.
Diluted EPS was $0.08, a decrease of 90.1%, and adjusted EPS was $0.78, down by 1.3%.
Kraft Heinz
Kraft Heinz
Kraft Heinz Revenue by Segment
Kraft Heinz Revenue by Geographic Location
Forward Guidance
For fiscal year 2024, the Company now expects Organic Net Sales to be down 2 percent to flat versus the prior year, Adjusted Operating Income growth of 1 to 3 percent versus the prior year, and Adjusted EPS growth of 1 to 3 percent, or in the range of $3.01 to $3.07.
Positive Outlook
- Continued ramp up of innovation and renovation, particularly in North America Retail.
- Increasing marketing investment to continue to drive brand superiority across our portfolio.
- Expect to increase distribution through our go-to-market strategy and global activations in Away From Home and Emerging Markets.
- Selectively increase investments in promotions, understanding that the consumer is looking for value.
- Expecting Adjusted Gross Profit Margin expansion in the range of 75 to 125 basis points versus the prior year.
Challenges Ahead
- Organic Net Sales to be down 2 percent to flat versus the prior year, compared to the previous expectation of 0 to 2 percent growth.
- Adjusted Operating Income growth of 1 to 3 percent versus the prior year, compared to the previous expectation of 2 to 4 percent growth.
- Effective tax rate on Adjusted EPS to be in the range of 20 to 22 percent.
- An unfavorable impact of approximately $30 million within interest expense and other expense/(income) versus the prior year.
- The outlook does not contemplate any potential additional share repurchases in 2024.
Revenue & Expenses
Visualization of income flow from segment revenue to net income