Kraft Heinz Co. KHC -0.16% raised its expectations for the full year and posted higher profit for the third quarter as it wrestles with inflationary pressures.
The food maker on Wednesday posted net income attributable to shareholders of $733 million, compared with $597 million a year earlier. Earnings were 59 cents a share, compared with 49 cents a share in the prior year.
For the full year, the company said it expects adjusted earnings before interest, taxes, depreciation and amortization of more than $6.2 billion, compared with the at least $6.1 billion it previously guided. It expects growth in 2021 organic net sales, or those excluding the effect of currency, acquisitions and divestitures and a 53rd week of shipments when they occur, to be flat compared with 2020.
Kraft Heinz said pricing in the third quarter rose 1.5 percentage points from a year earlier, primarily reflecting inflation-justified price increases in food-service and retail channels across regions. The costs the company has to grapple with include supply-chain, packaging and those of key commodities like dairy, meat and coffee.
Major food companies, including Conagra Brands Inc., PepsiCo Inc. and Lamb Weston Holdings Inc., have been boosting prices as they face escalating costs and labor and transportation problems that are disrupting the flow of staples to grocery-store shelves.
Adjusted earnings for the three months ended Sept. 25 were 65 cents a share. Analysts polled by FactSet were expecting 58 cents a share.
Net sales for the quarter fell to $6.32 billion from $6.44 billion. Analysts were looking for $6.04 billion. The decline includes a 4-percentage-point effect from the divestiture of its nuts business, the company said.
Kraft Heinz this year sold its Planters nut business to Hormel Foods Corp. for $3.35 billion in cash.
Write to Dave Sebastian at [email protected]
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