Kraft Heinz Announces Q1 Results, Sees Significant Gains from Cost Savings Initiatives

The Kraft Heinz Company reported its first quarter 2017 financial results, with an eye on stronger quarters to come.

"Although our top line results in the first quarter reflect a slow start to the year, we remain on track with our key initiatives," said CEO Bernardo Hees. "We are delivering product innovations, renovations, and geographic expansion that positions Kraft Heinz to drive organic sales growth for the balance of 2017 and beyond. We also have good visibility on costs, savings and what we must do to deliver another year of profitable growth for The Kraft Heinz Company."

Net sales were $6.4 billion, down 3.1 percent versus net sales for the year-ago period, according to the report. This included an “unfavorable” 0.4 percentage point impact from currency. Highlighted results included:

• Q1 net sales decreased 3.1%; Organic Net Sales decreased 2.7% including Easter shift and other factors in North America affecting comparisons with prior year
• Q1 net income attributable to common shareholders decreased 0.3%; Adjusted EBITDA decreased 2.4% on a constant currency basis
• Q1 diluted EPS of $0.73 was flat to the prior year; Adjusted EPS increased to $0.84 from $0.73 the prior year

United States net sales were $4.6 billion, down 3.5 percent versus the year-ago period, while pricing increased 0.7 percentage points primarily due to price increases in cheese.

The company noted that volume/mix decreased 4.2 percentage points, citing a combination of light consumption across categories, primarily driven by calendar shifts, as well as select distribution losses in the club channel.

The categories it said were most affected by these factors were foodservice, cheese, meats, and nuts. The continued growth from Lunchables, and innovation-led growth in frozen meals and macaroni and cheese, were able to partially offset those declines.

As the company look towards strengthening quarters, Deli Market News will report the latest.