Kraft Heinz Shares Drop 5% Amid Q4 Revenue Miss
The fourth straight quarter of revenue miss pushed the company’s shares down about 5% in premarket trading.
Packaged food makers have increased product prices in the past few years to counter higher input and manufacturing costs and protect their margins.
As a result, middle-to-lower income groups, faced with still elevated inflation, have reduced spending on higher-margin products even in categories like condiments and spices.
Kraft Heinz’s overall volumes fell 4.1 percentage points in the quarter that ended December 28, while prices were up 1 percentage point from the same period a year ago. Volumes were down 3.4 percentage points and prices were up 1.2 percentage points in the prior quarter.
Meanwhile, the company has boosted its marketing efforts and invested in technology to reclaim shelf space for its brands such as Mac & Cheese and Philadelphia from cheaper private-label alternatives.
These investments, coupled with higher manufacturing and labor costs, pushed down its quarterly adjusted gross profit margin by 40 basis points to 34.4%.
Kraft Heinz expects fiscal 2025 adjusted earnings per share to be in the range of $2.63 to $2.74, compared with analysts’ average estimates of $3.04, as per data compiled by LSEG.
The company posted fourth-quarter revenue of $6.58 billion, compared with analysts’ estimates of $6.66 billion.
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