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Kraft Heinz 8-K Report, Regulation FD Disclosure (Feb 21, 2024)

Reports
Regulation FD·Exhibits & Filings
Filing Date
Filed February 21, 2024
Period End
February 21, 2024
Security
KHC
In the record · 2016–202610-K1110-Q348-K161

KHC filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 161 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Feb ’19Feb ’19
  2. Material agreement8-K · Oct ’20Oct ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Leadership change8-K · Nov ’26Nov ’26

01—Abstract

Summary

Summary of the 8-K filed February 21, 2024. Cited figures are marked; the original filing is the authoritative source.

The Kraft Heinz Company (Nasdaq: KHC) filed this Form 8-K under Item 7.01 (Regulation FD Disclosure) to furnish a press release issued February 21, 2024, ahead of its presentation at the 2024 Consumer Analyst Group of New York (CAGNY) Conference.

The release states that CEO Carlos Abrams-Rivera and Global CFO Andre Maciel would discuss how the company plans to deliver consistent top-tier stockholder returns. The company describes three Growth Pillars (North America Retail, Global Away From Home, and Emerging Markets), supported by "Enablers of Growth" including marketing, R&D, technology, innovation, sales excellence, and a new Brand Growth System. It also says it has realigned its portfolio around three new platform roles: Accelerate, Protect, and Balance, with Accelerate platforms (Taste Elevation, Easy Ready Meals, and Substantial Snacking) set to receive prioritized investment.

The long-term financial algorithm is unchanged except that the Adjusted EBITDA target is replaced by an Adjusted Operating Income target. The stated long-term targets are Organic Net Sales growth of 2% to 3%, Adjusted Operating Income growth of 4% to 6%, Adjusted EPS growth of 6% to 8%, and Free Cash Flow Conversion at approximately 100%. The company reiterated its 2024 outlook from its fourth-quarter and full-year 2023 earnings: Organic Net Sales growth of 0% to 2%, Adjusted Operating Income growth of 2% to 4%, and Adjusted EPS of $3.01 to $3.07a (1% to 3% growth).

It also expects an unfavorable impact of approximately $45 millionb in interest and other expense/(income), and the outlook excludes any additional share buybacks in 2024. The filing is largely a forward-looking strategic and guidance update rather than a results release.

Investors should note that the outlook is presented on a non-GAAP basis and that the company states it cannot reconcile these measures to GAAP without unreasonable effort. The company also notes that 2023 net sales were approximately $27 billionc.

02—Key points

Key Highlights

  1. Strategic realignment: portfolio reorganized into three platform roles (Accelerate, Protect, Balance), with Accelerate platforms (Taste Elevation, Easy Ready Meals, Substantial Snacking) to receive prioritized investment.
  2. Long-term algorithm: Organic Net Sales growth of 2% to 3%, Adjusted Operating Income growth of 4% to 6%, Adjusted EPS growth of 6% to 8%, and Free Cash Flow Conversion of approximately 100%.
  3. Target change: the Adjusted EBITDA target was replaced with an Adjusted Operating Income target, which the company says better connects the organization to total shareholder return.
  4. 2024 outlook reiterated: Organic Net Sales growth of 0% to 2%, with positive price contribution and volumes expected to turn positive in the second half.
  5. 2024 Adjusted EPS guidance of $3.01 to $3.07 (1% to 3% growth), with an effective tax rate of 20% to 22% on Adjusted EPS.
  6. Adjusted Operating Income growth of 2% to 4% expected in 2024, with Adjusted Gross Profit Margin expanding modestly by 25 to 75 basis points.
  7. Approximately $45 million unfavorable impact expected in interest and other expense/(income), driven by foreign currency headwinds and higher-rate debt refinancing; outlook excludes additional share buybacks.

03—Questions

Frequently Asked Questions

  1. What did Kraft Heinz disclose in this 8-K filing?

    The company furnished a press release dated February 21, 2024, under Item 7.01 (Regulation FD Disclosure), issued in connection with its presentation at the 2024 CAGNY Conference. The information is furnished and not deemed filed under the Exchange Act.

  2. Did Kraft Heinz change its long-term financial targets?

    The targets remain unchanged except that the Adjusted EBITDA target was replaced with an Adjusted Operating Income target, which the company says is intended to strengthen the link to total shareholder return.

  3. What is the company's 2024 earnings outlook?

    The company reiterated guidance from its Q4 and full-year 2023 earnings: Organic Net Sales growth of 0% to 2%, Adjusted Operating Income growth of 2% to 4%, and Adjusted EPS of $3.01 to $3.07, or 1% to 3% growth, with an effective tax rate of 20% to 22%.

  4. Will Kraft Heinz repurchase additional shares in 2024?

    The outlook does not include the possibility of additional share buybacks in 2024.

  5. Why are the outlook measures presented on a non-GAAP basis?

    The company states that certain information necessary to calculate the most comparable GAAP measures is unavailable due to the uncertainty and difficulty of predicting items affecting comparability, such as currency, acquisitions and divestitures, restructuring, and impairment losses. As a result, it says it cannot reconcile these measures without unreasonable effort.

04—Continue

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