Kraft Heinz gets income spike despite sales dip

The company says it will be "more active" during key consumer events next year, though won't quite meet 2019 levels.
Kraft Heinz

Kraft Heinz saw net income of $733 million in Q3 – a boost up from $597 million last year – while its total revenue topped analyst forecasts.

The company said pricing in Q3 was up 1.5% from a year earlier, reflecting inflation-justified price increases in food-service and retail channels across geographies.

However, total net sales decreased 1.8% versus the year-ago period to $6.32 billion, with the divestiture of Kraft Heinz’ nuts business (which closed in Q2 of 2021) having a negative 4% impact on sales.

Organic net sales increased 1.3% versus the same period in 2020 – a 7.6% increase versus the comparable 2019 period, with growth in 2021 versus 2019 negatively affected by 1.4 percentage points when it exited the McCafé licensing agreement, said Kraft Heinz.

“We are effectively adapting to near-term challenges while transforming our business and rejuvenating our iconic brands to better serve consumers for the long term,” said Kraft Heinz CEO, Miguel Patricio.

In today’s conference call, Patricio said a critical aspect of that transformation is taking a “consumer approach to all that we do,” which means investing in consumer platforms during key event windows. The company is going to be “more active” in 2022 during critical windows, but not as deep as it was in 2019, Patricio says.

Patricio added that it is investing to improve relevance of its brands, while its ability to drive household penetration and repeat rates confirms the strength of its current portfolio.

The costs the company has to deal with include supply chain and packaging in key commodities like dairy, meat and coffee.