Kraft Heinz reports first-quarter 2020 results

Kraft Heinz has reported first-quarter 2020 financial results that reflected higher net sales and organic net sales growth due to strong demand for its leading brands, as well as the impact of divestitures, unfavorable currency, and higher costs versus the prior year.

“Our first-quarter results reflect how strongly our employees have responded to the global COVID-19 challenge and the exceptional level of service our teams have demonstrated during this critical time; and for that, it is an incredible privilege to be part of the Kraft Heinz Company,” said Miguel Patricio, Kraft Heinz CEO.

Net sales were $6.2 billion, up 3.3% versus the year-ago period, despite a negative 1.8 percentage point impact from divestitures and an unfavorable 1.1 percentage point impact from currency. Organic Net Sales increased by 6.2% versus the year-ago period, due to approximately 6–7 percentage points of growth as a result of increased consumer demand related to the COVID-19 pandemic. Pricing increased 1.6% versus the prior year period, as higher pricing in the United States and international (Europe, Middle East, Africa, Latin America, and Asia Pacific) segments more than offset lower pricing in Canada. Volume/mix grew 4.6 percentage points compared to the prior year period, as growth in at-home consumption more than offset an unfavorable impact from retail inventory reductions and lower foodservice shipments versus the prior-year period.

The impact of the COVID-19 pandemic on the company’s full-year 2020 results remains uncertain. In each of Kraft Heinz’s reporting segments, the company’s second-quarter 2020 outlook reflects, to varying degrees, incremental demand from retail customers due to an increase in at-home consumption, particularly in developed markets, as well as reduced demand in foodservice channels on a global basis. Currently, the company believes low to mid-single-digit organic net sales growth and mid-single-digit constant-currency adjusted EBITDA growth versus the prior year period is a reasonable expectation for second-quarter performance.