Written by Brenda Nakalema

Kraft Heinz Raises Its Sales Forecast After Earnings Top Expectations

Kraft Heinz (ticker: KHC) released its first-quarter earnings and smashed the average analyst estimate then went ahead and raised its …

Kraft Heinz (ticker: KHC) released its first-quarter earnings and smashed the average analyst estimate then went ahead and raised its full-year forecast for organic net sales. According to the food and beverage product manufacturer, it has been increasing prices in an attempt to offset the effects of inflation.

According to FactSet, Kraft Heinz (ticker: KHC) reported first-quarter net revenue of $776 million, an increase from analyst expectations of $655 million. Adjusted EPS of 60 cents also beat FactSet consensus of 53 cents.

The company went ahead and raised expectations for the full-year 2022 organic net sales to mid-single digits, an increase from its previous outlook. According to the company, the strong performance is a result of “strong performance data, ongoing business momentum, as well as additional pricing actions to mitigate ongoing inflation.”

“Our first quarter was a great start to a seemingly difficult year and yet another period where our amazing team rose to mitigate new and different macro environment challenges,” explained Kraft Heinz CEO Miguel Patricio.

The company stock is up by 1.3% in recent trading, standing at $42.84. It has climbed 19% year to date. As evidenced from its pricing power, consumers are clearly still sticking with the company’s products, encouraged by higher wages and savings rates, continuing the trend toward brand loyalty that initially began during the pandemic.

Despite the fact that private label remains a concern at a time when shoppers are looking for bargains in the midst of rising inflation, Kraft and others have managed to hold up, given producers have held steady with price increases rather than offering margin-eroding promotions.