Coronavirus-related food stockpiling boosts Kraft Heinz

Full-year impact of coronavirus on the company remains uncertain

LONDON (Reuters) - U.S. food producer Kraft Heinz Co reported higher-than-expected quarterly sales and profit on Thursday, helped by coronavirus-related stockpiling.

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The maker of Heinz ketchup, Kraft Macaroni & Cheese and Oscar Mayer lunch meat said first-quarter sales were $6.16 billion, slightly ahead of analysts' average estimate of $6.14 billion, according to IBES data from Refinitiv. Excluding hits from currency fluctuations and divestitures, organic sales rose 6.2 percent, in line with a forecast the company gave earlier this month.

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It warned then that the full benefit from the incremental sales lift would not fall to the bottom line, due to costs related to meeting the higher demand.

About 6 to 7 percentage points of sales growth were due to increased consumer demand related to the COVID-19 pandemic, as shoppers stocked up on pantry staples.

This photo illustration shows packs of Kraft's macaroni and cheese in Washington on April 21, 2015. (Photo: NICHOLAS KAMM/AFP via Getty Images)

First-quarter net income fell to $378 million, or 31 cents per share, from $405 million, or 33 cents per share, a year earlier. Excluding items, adjusted earnings were 58 cents per share, topping analysts’ average estimate of 55 cents.

TickerSecurityLastChangeChange %
KHCKRAFT HEINZ COMPANY32.79+0.25+0.76%

Looking forward, the company forecast low to mid-single-digit organic net sales growth and mid-single-digit constant-currency adjusted EBITDA growth for the current second quarter. It said that outlook reflected incremental demand from retail customers due to increased at-home consumption, particularly in developed markets, and reduced demand in foodservice channels globally.

"The impact of the COVID-19 pandemic on the company's full-year 2020 results remains uncertain," the company said.

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