Kraft Heinz beat third-quarter revenue expectations as consumers bought more of its packaged foods and condiments for at-home cooking.
Thanks to sustained at-home consumption in the third quarter, the company saw its net sales increase by 6% to $6.44 billion, beating analysts’ average estimate of $6.32 billion
The company which produces the famous Heinz Ketchup and Philadelphia cream cheese saw organic sales rise by 6.3%.
Operating income of the American food company however plummeted to approximately $1.15 billion, representing a decline of 2.8%.
In the US – the company’s biggest market – organic sales for its packaged food and condiments were up 7.4% to $4.7 billion for the quarter.
This rise was partly due to a 4-percentage point hike in prices due to reduced promotional activity compared to a year earlier and as a step to offset higher dairy prices.
Organic sales rose 4.6% in its international markets to US$1.3 billion, while Kraft’s Canadian business saw its organic sales decline by 1% to US$410 million.
The third quarter comes after Kraft Heinz was forced to write down the value of several business units and brands and after it agreed to sell its natural cheese business to Lactalis for US$3.2 billion.
“We are building momentum, and we are confidently optimistic about our near-term performance.”
Miguel Patricio, Kraft Heinz CEO.
Patricio further noted that Kraft Heinz was heading into 2021 with its new operating model fully implemented, its platform strategy coming to life in the marketplace, and its growth investments ramping up.
The pandemic-led spurt in demand has been a boon for Kraft, which has been struggling with weak sales and was forced to write down the value of several brands by billions of dollars over the past two years.
Compared to its peers, Kraft generated the highest increase in sales over the past 12 weeks at U.S. retail stores.
It rose 9.8% for Kraft, 5% for Kellogg and 8.7% for General Mills, according to data provided to Guggenheim by Nielsen.