Key Takeaways
- Kraft Heinz shares dropped after the company reported first-quarter results that missed analysts’ estimates.
- The food and beverage giant said its sales and volume/mix dropped as higher prices dragged down demand.
- Kraft Heinz said the slide in its volume/mix was also hurt by the reduction of Supplemental Nutrition Assistance Program (SNAP) benefits in the U.S.
Higher prices weighed on demand for Kraft Heinz (KHC) products, and shares dropped over 6% in early trading Wednesday after the food and beverage giant reported first-quarter results that missed analysts’ estimates.
Revenue Misses Estimates
Kraft Heinz reported first-quarter revenue of $6.41 billion, down 1.2% from a year ago and missing analysts’ estimates. Diluted earnings per share (EPS) came in at 66 cents, down 2.9% from a year earlier and also missing forecasts.
Sales fell in all three of the company’s reported regional segments. They were down in North America by 1.2% to $4.83 billion, 0.2% lower to $855 million in International Developed Markets, and fell 2.1% to $728 million in Emerging Markets.
Kraft Heinz said its volume/mix slid 3.2 percentage points (pps) overall, with a decline of 3.7 pps in North America and fall of 3.8 pps in International Developed Markets, while they advanced 1.4 pps in Emerging Markets.
Demand Hurt by Higher Prices
The maker of Heinz ketchup, Kraft macaroni and cheese, and Country Time lemonade said the slide in its volume/mix was “driven by elasticity impacts from pricing actions and the reduction of Supplemental Nutrition Assistance Program (SNAP) benefits in the United States.”
The company reiterated its full-year outlook, with adjusted EPS expected to be in the range of $3.01 to $3.07, which would represent 1% to 3% growth from 2023.
Kraft Heinz shares were down 6.2% at $36.24 as of 11:15 a.m. ET Wednesday following the release, sending them into negative territory for 2024.