Food giant Kraft Heinz Co beat third-quarter sales estimates on Wednesday, as higher product prices offset pressure from reduced demand for its packaged meals and condiments.
Global packaged foods makers have been steadily raising product prices over the past year to counter increased costs tied to labour, ingredients and transportation at a time when consumers are steeling their wallets against skyrocketing energy and food prices.
Although the preference for cooking at home, which developed during the pandemic, has proven to be relatively sticky so far, cracks in demand are beginning to emerge as shoppers hunt for more affordable alternatives and analysts caution that packaged makers may be reaching their ceiling on price hikes.
Shares of the Jell-O maker rose 3% in premarket trading.
The company reported net income attributable to common shareholders of $432 million (€430.8 million), or 35 cents per share, for the quarter ended 24 September, compared with $733 million (€731 million), or 59 cents per share, a year earlier.
The Heinz ketchup maker's net sales rose to $6.51 billion (€6.5 billion) in the third quarter from $6.32 billion (€6.3 billion) a year earlier. Analysts on average had expected $6.27 billion (€6.3 billion), according to IBES data from Refinitiv.
'Another Quarter Of Strong Results'
Kraft Heinz CEO and chair of the board, Miguel Patricio, said, "We delivered another quarter of strong results as we continue to successfully navigate a volatile environment. We are driving net sales growth across both North America and International segments, fuelled by each of our three pillars of growth: our GROW platforms in North America, Foodservice, and Emerging Markets. At the same time, the consumer remains our top priority.
"We're dedicated to providing solutions for consumers by leveraging the power of our brands to deliver on value at a time when consumers need it most. I'm very proud of what we have been able to deliver thus far, but our work continues. We remain focused on advancing our long-term strategy, and believe we are well-positioned to drive profitable growth and generate attractive returns for our stockholders."
News by Reuters, additional reporting by ESM. For more A-Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.