Q1 2024 Earnings Summary
Reported on Jan 4, 2025 (Before Market Open)
Pre-Earnings Price$38.61Last close (Apr 30, 2024)
Post-Earnings Price$37.26Open (May 1, 2024)
Price Change
$-1.35(-3.50%)
- Kraft Heinz expanded adjusted gross profit margin by 170 basis points in Q1 2024, driven by supply chain efficiencies, enabling increased investments in marketing (up 13%), R&D (up 25%), and technology (up 20%) versus prior year.
- Generated year-to-date free cash flow conversion of 56%, a 30-percentage point improvement versus prior year, primarily driven by a 57% reduction in working capital; returned $636 million to stockholders, including $486 million in dividends and $150 million in share repurchases.
- Reiterated 2024 outlook, expecting organic net sales growth of 0%-2%, adjusted operating income growth of 2%-4%, and adjusted EPS growth of 1%-3%; increased expected adjusted gross profit margin expansion to a range of 50-100 basis points from prior range of 25-75 basis points.
- Kraft Heinz experienced a decline in organic net sales of 0.5% in the first quarter of 2024, with North America sales down 1.2% and international developed markets down 1.3%, indicating potential challenges in driving top-line growth.
- The company is facing industry softness in the U.S., particularly in the Away-From-Home segment, where sales were negatively impacted by a softening restaurant market and two planned business exits, resulting in an approximate $15 million reduction in topline revenue per quarter.
- Kraft Heinz is losing market share in developed markets, and while they are seeing improvements as price gaps narrow, the decline in organic net sales in their BALANCE platforms suggests challenges in maintaining performance and profitability across all segments.