Kraft Heinz Co raised its forecast for annual organic sales growth after benefiting from higher product prices and sustained demand for its packaged meals and condiments.
Packaged food makers, including Kraft Heinz and Campbell Soup Co, are still seeing strong demand for their quick meals, sauces and cooking essentials that have exploded in popularity during the shutdowns.
The Philadelphia-based cream cheese maker expects organic revenue growth in 2022 of mid-single-digit percentage, compared to its prior outlook of low-single-digit percentage increases.
In a new boost, consumers have so far shown little resistance to price increases to combat a global spike in labor, raw material and freight costs. But Kraft Heinz did not raise its base earnings forecast for 2022.
“Although we are seeing higher inflation than initially expected, pricing and growth efficiency are already offsetting the vast majority of these inflationary pressures,” kraft said Heinz chief financial officer André Maciel in his prepared remarks.
“Expectations for food companies may have been lowered a bit overnight,” JP Morgan analyst Ken Goldman wrote in a note.
The company’s revenue fell to $6.05 billion (€5.7 billion) in the first quarter ended March 26 from $6.39 billion (€6.07 billion) one year earlier. Analysts on average had expected $5.83 billion (€5.5 billion), according to IBES data from Refinitiv.
Read more: Kraft Heinz acquires majority stake in Brazilian food company Hemmer
“A good start to the year”
Commenting on the company’s performance, Kraft Heinz CEO Miguel Patricio said, “Our first quarter was a strong start to the year and another period in which our team rose to mitigate challenges. new and different macro environment.
“We continue to build critical capabilities, greater business agility and additional financial flexibility to navigate near-term turbulence while strengthening our long-term advantage. We still have work to do, more opportunities ahead, and we remain confident in our ability to deliver our plan for the year as well as our long-term growth strategy.”
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