Kraft Heinz missed Wall Street expectations for first-quarter sales on Wednesday, as inflation-weary consumers pushed back on higher prices of its branded lunch combos, meat cold cuts and mac & cheese.
Shares were down 4% before the bell, even as the packaged food maker kept unchanged its fiscal year 2024 targets.
In a shift from 2023 when government benefits helped Americans expand their grocery budgets, shoppers this year are hunting for value, prompting Kraft-Heinz and peers to re-jig their products and strategies following years of price hikes.
Overall volumes for the quarter fell 3.2 percentage points, while prices rose 2.7 percentage points across Kraft-Heinz’s portfolio.
Volumes decline in its biggest North America segment eased, down 3.7 percentage points from last year’s drop of 6.5 percentage points.
Kraft Heinz is leaning on promotions to help aid a recovery in volumes across its markets but still-high inflation has hampered those efforts.
The company still expects volumes to turn positive in the back half of the year.
The Heinz ketchup maker posted net sales of $6.41 billion in the three months ended March 30, compared with analysts’ average estimate of $6.43 billion, according to LSEG data.
Adjusted earnings per share of 69 cents was in line with analysts’ estimates.
The company maintained its forecasts for organic net sales growth to be flat to 2% and adjusted earnings to grow in the range of 1% to 3%.
(This story has been refiled to add the dropped word ‘cents’ in paragraph 9)
(Reporting by Savyata Mishra in Bengaluru; Editing by Sriraj Kalluvila)
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