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Kraft Heinz 8-K Report, Financial Results (May 1, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 1, 2024
Period End
May 1, 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 May 1, 2024. Cited figures are marked; the original filing is the authoritative source.

The Kraft Heinz Company reported first quarter 2024 results for the period ended March 30, 2024, in a press release furnished as Exhibit 99.1.

Net sales were $6.41 billiona, down 1.2 percent versus the prior year, while Organic Net Sales decreased 0.5 percent. Price increased 2.7 percentage points, offset by a 3.2 percentage point decline in volume/mix, which management attributed to elasticity from pricing actions and the reduction of SNAP benefits in the United States. Gross profit rose 6.2 percent to $2.24 billion, and operating income rose 4.7 percent to $1.30 billion, driven largely by unrealized gains on commodity hedges.

Diluted EPS was $0.66b, down 2.9 percent, reflecting a net loss on the sale of businesses and higher tax expense. Adjusted EPS was $0.69, up 1.5 percent, and Adjusted Operating Income was $1.27 billion, up 1.7 percent. Cash generation improved, with net cash from operating activities of $771 million, up 58.6 percent, and Free Cash Flow of $477 million, up 116.8 percent.

The company paid $486 millionc in dividends and repurchased $329 million of common stock, of which $150 million was under its publicly announced program. Remaining authorization under that program was $2.6 billion as of March 30, 2024.

Kraft Heinz reaffirmed its full-year 2024 outlook, including Organic Net Sales growth of 0 to 2 percent, Adjusted Operating Income growth of 2 to 4 percent, and Adjusted EPS growth of 1 to 3 percent, or $3.01 to $3.07d. The outlook does not contemplate additional share repurchases in 2024.

02—Key points

Key Highlights

  1. Net sales decreased 1.2 percent to $6.41 billion; Organic Net Sales decreased 0.5 percent.
  2. Price increased 2.7 percentage points, while volume/mix declined 3.2 percentage points, attributed to pricing elasticity and reduced SNAP benefits in the United States.
  3. Operating income rose 4.7 percent to $1.30 billion, primarily due to unrealized gains on commodity hedges versus unrealized losses in the prior year.
  4. Diluted EPS was $0.66, down 2.9 percent, due to a net loss on the sale of businesses and higher tax expense; Adjusted EPS was $0.69, up 1.5 percent.
  5. Operating cash flow was $771 million, up 58.6 percent, and Free Cash Flow was $477 million, up 116.8 percent.
  6. The company paid $486 million in dividends and repurchased $329 million of common stock, with $2.6 billion remaining under its share repurchase program.
  7. Full-year 2024 outlook was reaffirmed, including Adjusted EPS of $3.01 to $3.07 and Adjusted Operating Income growth of 2 to 4 percent.

03—Questions

Frequently Asked Questions

  1. Did Kraft Heinz change its 2024 guidance?

    No. The company reaffirmed its 2024 outlook for Organic Net Sales growth of 0 to 2 percent, Adjusted Operating Income growth of 2 to 4 percent, and Adjusted EPS growth of 1 to 3 percent, or $3.01 to $3.07.

  2. Why did reported operating income grow faster than Adjusted Operating Income?

    Operating income rose 4.7 percent, primarily driven by unrealized gains on commodity hedges in the current year compared with unrealized losses in the prior year. Adjusted Operating Income, which excludes these items, rose 1.7 percent.

  3. Why did diluted EPS decline while Adjusted EPS increased?

    Diluted EPS fell 2.9 percent to $0.66, mainly due to a net loss on the sale of businesses and higher tax expense. Adjusted EPS rose 1.5 percent to $0.69, driven by higher Adjusted Operating Income and fewer shares outstanding.

  4. What drove the volume decline in the quarter?

    Volume/mix declined 3.2 percentage points, primarily in North America and International Developed Markets, due to elasticity impacts from pricing actions and the reduction of SNAP benefits in the United States. Emerging Markets volume/mix grew.

  5. How did cash flow and shareholder returns compare with the prior year?

    Operating cash flow was $771 million, up 58.6 percent, and Free Cash Flow was $477 million, up 116.8 percent, mainly due to lower inventory cash outflows. The company returned capital through $486 million in dividends and $329 million in share repurchases.

04—Continue

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