Kraft Heinz slides to fourth-quarter loss, but results beat estimates
(RTTNews) – Kraft Heinz Co. (KHC) on Wednesday announced a net loss for the fourth quarter compared to a profit last year, penalized by strong non-cash impairments. However, adjusted earnings per share and quarterly net sales exceeded analysts’ estimates. The company also provided organic sales growth guidance for the full year of 2022.
“We are generating efficiencies to fuel additional investments in our business, which, together with efficient pricing, mitigate inflationary pressures,” CEO Miguel Patricio said.
For the fourth quarter, the company reported a net loss attributable to common shareholders of $257 million or $0.21 per share, compared with $1.03 billion or $0.84 per share in the year-ago quarter.
The loss was attributable to non-cash impairments of $1.3 billion, primarily due to the impairment of the Kraft brand following the closing of the Cheese transaction, higher interest expense and losses not performed on merchandise covers.
Excluding items, adjusted earnings for the quarter were $0.79 per share, compared to $0.80 per share in the prior year quarter.
On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.63 per share for the quarter. Analyst estimates generally exclude special items.
Net sales for the quarter fell 3.3% to $6.71 billion from $6.94 billion in the same quarter last year. Analysts had expected sales of $6.61 billion for the quarter.
Net sales include a negative impact of 7.3 percentage points from acquisitions and disposals and a favorable impact of 0.1 percentage point from the exchange rate. Organic net sales increased by 3.9%. The volume/mixture was essentially stable.
Sales in the United States decreased by 6.8% to $4.74 billion, while international sales increased by 6.5% to $1.50 billion and sales in Canada increased by 5, 2% to $471 million from a year ago.
Looking ahead to fiscal 2022, the company now expects a single-digit percentage increase in organic net revenue. The Street expects sales to fall 5.0% to $24.59 billion for the year.
Separately, the Company’s Board of Directors declared a regular quarterly dividend of $0.40 per common share, payable March 25, 2022, to shareholders of record as of March 11, 2022.
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