The market is starting to see that things are finally coming together for this long-beleaguered company. Shares of food giant Kraft Heinz (KHC 4.73%) are up 4.4% as of 11:17 a.m. ET today, according to numbers from S&P Global Market Intelligence, even though the organization's second-quarter revenue fell short of expectations. Investors are impressed with the company's profitability, and hopeful that it will continue to improve as a result of efficiency-oriented initiatives. Slowing sales is no problem for ...

Financial Data and Key Metrics Changes - Organic net sales declined by 2.4% year-over-year, which was lower than expectations due to consumer pressure and unexpected impacts from Lunchables sales [7][36] - Adjusted operating income grew by 2.0%, with adjusted operating income margin increasing by 120 basis points, driven by productivity gains [50][55] - Adjusted EPS declined by 1.3%, primarily due to lapping a one-time tax benefit in the prior year [54] Business Line Data and Key Metrics Changes - North America Organic net sales declined by 2.9%, impacted by lower Lunchables sales and a temporary plant closure [49] - The innovation pipeline is gaining momentum, with a year-to-date increase in organic net sales attributed to new product launches [2][5] - The Taco Bell partnership has exceeded expectations, with sales in Dollar General increasing by 47% year-over-year across Oscar Mayer products [3] Market Data and Key Metrics Changes - In Emerging Markets, organic net sales grew by 3.4%, although challenges in China and Brazil limited growth [68] - International Developed Markets saw a decline in organic net sales by 3.9%, primarily due to price reductions in the U.K. [49] - The company gained 60 basis points of share in Emerging Markets, while losing share in U.S. Away From Home and North America Retail [14][15] Company Strategy and Development Direction - The company is focused on long-term sustainable growth, avoiding short-term wins at the expense of future success [39][78] - Investments are being made in marketing, R&D, and technology to drive top-line growth and brand superiority [6][21] - The company is committed to managing its business in a disciplined manner, preserving profitability while responding to top-line headwinds [36][67] Management's Comments on Operating Environment and Future Outlook - The consumer environment remains challenging, with expectations for a gradual recovery in top-line growth [36][55] - Management is optimistic about the potential for sequential improvement in the second half of the year, driven by innovation and selective investments [75][76] - The company anticipates a continued ramp-up of innovation and renovation to improve top-line performance, particularly in North America Retail [57] Other Important Information - The company has increased its CapEx spend by $35 million, or 7%, focusing on growth and digital advancements [21] - Free cash flow conversion improved to 65%, driven by working capital improvements [53] - The company returned approximately $1.3 billion to stockholders in the first half of the year, maintaining a target net leverage ratio of approximately three times [73] Q&A Session Summary Question: What are the expectations for top-line growth in the second half of the year? - Management expects a gradual improvement in top-line growth, driven by innovation and selective investments, despite a challenging consumer environment [36][55] Question: How is the company addressing the challenges in Emerging Markets? - The company is focusing on increasing distribution and leveraging global activations to drive growth in Emerging Markets [58][68] Question: What is the outlook for adjusted operating income growth? - Adjusted operating income growth is now expected to be in the range of 1% to 3%, reflecting a slower recovery than previously anticipated [55]

Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, ...

Kraft Heinz (KHC) came out with quarterly earnings of $0.78 per share, beating the Zacks Consensus Estimate of $0.73 per share. This compares to earnings of $0.79 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 6.85%. A quarter ago, it was expected that this the processed food company with dual headquarters in Pittsburgh and Chicago would post earnings of $0.68 per share when it actually produced earnings of $0.69, delivering ...

[Q2 2024 Financial Performance](index=1&type=section&id=Kraft%20Heinz%20Reports%20Second%20Quarter%202024%20Results) [Performance Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) Q2 2024 saw a 3.6% net sales decrease, but Adjusted Gross Profit Margin rose 210 bps and Adjusted Operating Income grew 2.0%, while GAAP EPS fell 90.1% due to impairment - CEO noted **net sales lower than anticipated** due to cautious consumer sentiment, while company focuses on efficiencies for brand investment and profit growth[3](index=3&type=chunk) Q2 2024 Key Financial Metrics | Metric | Q2 2024 Result | Change vs. PY | | :--- | :--- | :--- | | Net Sales | $6.5 billion | -3.6% | | Organic Net Sales | - | -2.4% | | Adjusted Gross Profit Margin | 35.5% | +210 bps | | Operating Income | $0.5 billion | -62.1% | | Adjusted Operating Income | $1.4 billion | +2.0% | | Diluted EPS | $0.08 | -90.1% | | Adjusted EPS | $0.78 | -1.3% | - Company anticipates **improved top-line trends in H2 2024** through innovation, marketing, expanded distribution, and promotional investments[3](index=3&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) Overall sales declined due to volume/mix decreases in North America and International Developed markets, while Emerging Markets showed growth, and GAAP Operating Income was significantly impacted by $854 million in impairment losses [Net Sales Analysis](index=2&type=section&id=Net%20Sales%20Analysis) Q2 2024 Net Sales Breakdown by Segment (vs. PY) | Segment | Net Sales ($M) | % Change | Organic Net Sales % Change | Price (pp) | Volume/Mix (pp) | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | $4,921 | (3.1)% | (2.9)% | 1.3 | (4.2) | | International Developed | $885 | (5.0)% | (3.9)% | (1.5) | (2.4) | | Emerging Markets | $670 | (5.7)% | 3.4% | 1.9 | 1.5 | | **Kraft Heinz Total** | **$6,476** | **(3.6)%** | **(2.4)%** | **1.0** | **(3.4)** | YTD 2024 Net Sales Breakdown by Segment (vs. PY) | Segment | Net Sales ($M) | % Change | Organic Net Sales % Change | Price (pp) | Volume/Mix (pp) | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | $9,749 | (2.2)% | (2.1)% | 1.9 | (4.0) | | International Developed | $1,740 | (2.9)% | (2.6)% | 0.5 | (3.1) | | Emerging Markets | $1,398 | (3.8)% | 4.4% | 2.9 | 1.5 | | **Kraft Heinz Total** | **$12,887** | **(2.4)%** | **(1.5)%** | **1.8** | **(3.3)** | [Profitability and Earnings Analysis](index=2&type=section&id=Profitability%20and%20Earnings%20Analysis) - The **62.1% decrease in GAAP Operating Income** was primarily driven by non-cash impairment losses of $854 million in Q2 2024[9](index=9&type=chunk) Q2 2024 Profitability Metrics (in millions, except EPS) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Gross Profit | $2,294 | $2,261 | 1.5% | | Operating Income | $522 | $1,376 | (62.1)% | | Net Income | $100 | $998 | (90.0)% | | Diluted EPS | $0.08 | $0.81 | (90.1)% | | Adjusted Operating Income | $1,380 | $1,351 | 2.0% | | Adjusted EPS | $0.78 | $0.79 | (1.3)% | - The **1.3% decline in Adjusted EPS** was primarily due to lapping a one-time tax benefit from the prior year, offsetting higher Adjusted Operating Income and fewer shares outstanding[9](index=9&type=chunk) [Cash Flow and Capital Return](index=3&type=section&id=Cash%20Flow%20and%20Capital%20Return) H1 2024 operating cash flow increased 8.1% to $1.7 billion, with Free Cash Flow up 8.7% to $1.2 billion, and $1.5 billion returned to stockholders YTD 2024 Cash Flow & Capital Return (in billions) | Metric | YTD 2024 | % Change vs. PY | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1.7 | +8.1% | | Free Cash Flow | $1.2 | +8.7% | | **Total Capital Return** | **$1.5** | - | | - Cash Dividends Paid | $0.97 | - | | - Share Repurchases | $0.54 | - | - The increase in operating cash flow was primarily due to **favorable improvements in working capital**, particularly within inventory and accounts payable[9](index=9&type=chunk) - As of June 29, 2024, the company has **$2.4 billion remaining** under its authorized share repurchase program[9](index=9&type=chunk) [Full Year 2024 Outlook](index=4&type=section&id=Outlook) [Revised Guidance](index=4&type=section&id=Revised%20Guidance) Kraft Heinz lowered its full-year 2024 guidance for Organic Net Sales and Adjusted Operating Income but reaffirmed Adjusted EPS growth, supported by improved Adjusted Gross Profit Margin expansion Full Year 2024 Guidance Update | Metric | Previous Guidance | New Guidance | | :--- | :--- | :--- | | Organic Net Sales Growth | 0% to 2% | -2% to 0% | | Adjusted Operating Income Growth | 2% to 4% | 1% to 3% | | Adjusted Gross Profit Margin Expansion | 50 to 100 bps | 75 to 125 bps | | Adjusted EPS Growth | 1% to 3% ($3.01 to $3.07) | **Unchanged** | - The company continues to expect an effective tax rate on Adjusted EPS to be in the range of **20 to 22 percent** for the full year[13](index=13&type=chunk) [Financial Statements and Reconciliations](index=9&type=section&id=Financial%20Statements%20and%20Reconciliations) [Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2024 net income sharply declined to $100 million from $998 million, primarily due to an $854 million goodwill impairment loss impacting operating income Q2 2024 Income Statement Highlights (in millions) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net sales | $6,476 | $6,721 | | Gross profit | $2,294 | $2,261 | | Goodwill impairment losses | $854 | $0 | | Operating income/(loss) | $522 | $1,376 | | Net income/(loss) | $100 | $998 | [Reconciliation of Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) Reconciliation schedules detail GAAP to non-GAAP adjustments, with an $854 million impairment loss being the most significant adjustment to Q2 2024 operating income - Organic Net Sales for Q2 2024 were adjusted for a **negative 1.0 pp impact from currency** and a **negative 0.2 pp impact from divestitures**[33](index=33&type=chunk) Q2 2024 Reconciliation of Operating Income to Adjusted Operating Income (in millions) | Description | Amount | | :--- | :--- | | **Operating income/(loss) (GAAP)** | **$522** | | Restructuring activities | $3 | | Unrealized losses/(gains) on commodity hedges | $1 | | Impairment losses | $854 | | **Adjusted Operating Income (Non-GAAP)** | **$1,380** | [Consolidated Balance Sheet](index=22&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2024, total assets decreased to $88.8 billion from $90.3 billion, mainly due to a nearly $1 billion reduction in Goodwill from impairment charges Balance Sheet Summary (in millions) | Account | June 29, 2024 | Dec 30, 2023 | | :--- | :--- | :--- | | Total current assets | $7,530 | $7,929 | | Goodwill | $29,501 | $30,459 | | **TOTAL ASSETS** | **$88,797** | **$90,339** | | Total current liabilities | $7,486 | $8,037 | | Long-term debt | $19,265 | $19,394 | | **TOTAL LIABILITIES** | **$39,766** | **$40,617** | | **TOTAL EQUITY** | **$49,021** | **$49,688** | [Consolidated Statements of Cash Flows](index=23&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2024 net cash from operating activities increased to $1.71 billion, despite lower net income, largely due to non-cash impairment add-backs, while financing activities saw increased cash usage from share repurchases YTD 2024 Cash Flow Summary (in millions) | Cash Flow Activity | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,713 | $1,584 | | Net cash used for investing activities | ($632) | ($475) | | Net cash used for financing activities | ($1,565) | ($1,187) | | **Net decrease in cash** | **($502)** | **($92)** | - Free Cash Flow for the six months ended June 29, 2024 was **$1.17 billion**, an increase from $1.08 billion in the prior year period[66](index=66&type=chunk) [Definitions and Disclosures](index=5&type=section&id=Definitions%20and%20Disclosures) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Organic Net Sales, Adjusted Operating Income, and Free Cash Flow to provide a clearer view of operational performance by excluding specific non-recurring items - Management uses non-GAAP measures to compare performance on a consistent basis for business decision making by removing the impact of certain items that do not directly reflect underlying operations[21](index=21&type=chunk) - Key non-GAAP definitions include: - **Organic Net Sales**: Excludes impacts of currency, acquisitions, and divestitures[23](index=23&type=chunk) - **Adjusted Operating Income**: Excludes items like restructuring activities, impairment losses, and unrealized gains/losses on commodity hedges[24](index=24&type=chunk) - **Free Cash Flow**: Defined as net cash from operating activities less capital expenditures[27](index=27&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements about plans and guidance, which are not guarantees and are subject to various risks and uncertainties including consumer preferences and macroeconomic conditions - Forward-looking statements are identified by words such as "anticipate," "expect," "will," "guidance," and "outlook"[14](index=14&type=chunk) - Important risk factors that could cause actual results to differ materially include operating in a highly competitive industry, changes in consumer demand, volatility in commodity costs, and disruptions in the global economy[15](index=15&type=chunk)

Earnings and Financial Performance - The Kraft Heinz Company is scheduled to release its Q2 financial results on July 31 before the market opens [1] - In Q1 FY24, the company reported a 1.2% YoY sales decline to $6.411 billion, missing the analyst consensus estimate of $6.429 billion [2] - Analysts expect Q2 earnings of 74 cents per share, down from 79 cents per share in the year-ago period, with expected revenue of $6.55 billion compared to $6.81 billion a year earlier [5] Analyst Ratings and Price Targets - B of A Securities analyst Bryan Spillane maintained a Buy rating but cut the price target from $42 to $38 on July 10 [4] - Wells Fargo analyst Chris Carey maintained an Equal-Weight rating and reduced the price target from $37 to $34 on June 27 [4] - Piper Sandler analyst Michael Lavery maintained an Overweight rating but lowered the price target from $42 to $41 on June 20 [4] - Evercore ISI Group analyst David Palmer upgraded the stock from In-Line to Outperform and raised the price target from $40 to $42 on Dec 11, 2023 [4] - Bernstein analyst Alexia Howard upgraded the stock from Market Perform to Outperform with a price target of $40 on Nov 14, 2023 [4] Stock Performance - Kraft Heinz shares rose 1.3% to close at $33.84 on Tuesday [6]

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Analysts and investors alike will be keeping a close eye on the performance of Kraft Heinz in its upcoming earnings disclosure. The company's earnings report is set to go public on July 31, 2024. It is anticipated that the company will report an EPS of $0.74, marking a 6.33% fall compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $6.59 billion, down 1.9% from the yearago period. The Zacks Rank system, spanning from #1 (Strong Buy) to #5 ...

0.00% · KHC: 32.07 (-10.6! -15.00% KHC: 6 250 126 Friday, Jul 12, 2024 Image Source: Zacks Investment Research +40.00% SMA (50): 34.002 +20.00% · KHC: 32.07 (-7.8 -20.00% KHC: 6 250 126 the has think in this in this is Friday, Jul 12, 2024 Oct '22 Image Source: Zacks Investment Research about the stock's sustainability, signaling the potential for further downside. 2.0 1.9 1.7 1.6 KHC: 1.46 1.4 Z SI76M: 1.33 1.3 2023 2024 2020 2022 KRAFT HEINZ (KHC) Title Median High KRAFT HEINZ (KHC) Food-Misc Diversified ...

This blue chip stock has market-beating potential after a disastrous decade. Stocks you can buy and hold forever must be resilient businesses, with the staying power to last decades. The problem is that these no-brainer winners are seldom cheap. Kraft Heinz (KHC -0.34%), down a whopping 67% from its high, looks like a rare deal. However, blue chip stocks like Kraft Heinz don't lose over half their value by accident; the company has battled through some serious challenges that prospective investors should kn ...