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Dec 30, 2023
Kraft Heinz Q4 2023 Earnings Report
Kraft Heinz's financial performance declined due to industry headwinds and the impact of a 53rd week in the prior year, but the company is optimistic about future growth.
Key Takeaways
Kraft Heinz reported a decrease in net sales and net income for Q4 2023, impacted by a 53rd week in the prior year and industry headwinds. However, the company is optimistic about future growth, expecting positive contributions from price and volume improvements in the second half of 2024.
Net sales decreased by 7.1%, with organic net sales down by 0.7%.
Gross profit margin increased by 180 basis points to 33.8%.
Net income decreased by 14.6% to $757 million.
Adjusted EPS was $0.78, down 8.2%.
Kraft Heinz
Kraft Heinz
Forward Guidance
For fiscal year 2024, the Company expects Organic Net Sales growth of 0 to 2 percent, Adjusted Operating Income growth of 2 to 4 percent, and Adjusted EPS growth of 1 to 3 percent, or in the range of $3.01 to $3.07.
Positive Outlook
- Positive contribution from price throughout the year
- Volumes inflecting positive in the second half of the year
- Adjusted Gross Profit Margin is expected to expand modestly, in the range of 25 to 75 basis points versus the prior year.
- Adjusted EPS growth of 1 to 3 percent, or in the range of $3.01 to $3.07.
- The Company expects an effective tax rate on Adjusted EPS to be in the range of 20 to 22 percent.
Challenges Ahead
- Organic Net Sales growth of 0 to 2 percent versus the prior year.
- Adjusted Operating Income growth of 2 to 4 percent versus the prior year.
- The Company expects an unfavorable impact of approximately $45 million within interest and other expense/(income) versus the prior year.
- This is primarily driven by foreign currency headwinds and debt refinancing that will come at a higher rate.
- The outlook does not include the possibility of additional share buyback in 2024.