What Awaits Kraft Heinz (KHC) as It Readies for Q3 Earnings?
The Kraft Heinz Company KHC is likely to register top-and-bottom-line growth when it reports third-quarter 2023 earnings on Nov 1. The Zacks Consensus Estimate for revenues is pegged at $6.7 billion, suggesting a rise of 3% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 66 cents per share. This calls for growth of 4.8% from the year-ago quarter’s reported figure. KHC has a trailing four-quarter earnings surprise of 11.3%, on average.
Factors to Note
Solid pricing initiatives have been aiding Kraft Heinz amid cost inflation. In the second quarter of 2023, the company’s pricing rose 11 percentage points year over year, reflecting growth in North America and International segments, thereby contributing to net sales growth. Our model suggests an 8.5% increase in pricing for the third quarter.
Kraft Heinz Company Price, Consensus and EPS Surprise
Kraft Heinz Company price-consensus-eps-surprise-chart | Kraft Heinz Company Quote
Kraft Heinz has been benefiting from its focus on its operating model that incorporates five key elements. These include People with Purpose, Consumer Platforms, Ops Center, Partner Program and Fuel Our Growth. The Consumer Platforms represents a portfolio of six consumer-driven platforms like Taste Elevation, Easy Meals Made Better and Real Food Snacking, among others. The Ops Center element enables Kraft Heinz to establish an efficient, fast and integrated supply-chain network.
The Partner Program element is designed to create solid customer partnerships and develop new strategic partnerships. Lastly, the Fuel Our Growth strategy is aimed at investing in growth opportunities, solidifying the long-term market position and staying dedicated to returning value to shareholders. This strategy has been helping KHC manage its portfolio, augment geographic presence and increase focus on growth areas. These upsides are likely to favorably impact results in the quarter under review.
Kraft Heinz has been grappling with the inflationary environment, although inflation continues to moderate. On its last earnings call, management highlighted that it expects mid-to-high-single-digit inflation in 2023, including low-to-mid-single-digit inflation in the second half of the year. We anticipate a 21.2% increase in adjusted SG&A expenses for the third quarter of 2023, with the rate likely to expand 220 basis points to 14.4%.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Kraft Heinz this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Kraft Heinz carries a Zacks Rank #3 and has an Earnings ESP of -0.49%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
e.l.f. Beauty ELF currently has an Earnings ESP of +0.42% and a Zacks Rank #1. The company is likely to register top-and-bottom-line growth when it reports third-quarter 2023 numbers. The Zacks Consensus Estimate for e.l.f. Beauty’s quarterly earnings per share of 54 cents suggests an increase of 50% from the year-ago quarter’s levels. You can see the complete list of today’s Zacks #1 Rank stocks here.
ELF has a trailing four-quarter negative earnings surprise of 108.3%, on average. The Zacks Consensus Estimate for e.l.f. Beauty’s quarterly revenues is pegged at $197.3 million, indicating a rise of 61.2% from the figure reported in the prior-year quarter.
Church & Dwight Co. CHD has an Earnings ESP of +2.21% and a Zacks Rank #3. The company is slated to witness top-line growth when it reports third-quarter 2023 results. The Zacks Consensus Estimate for CHD’s quarterly revenues is pegged at $1.43 billion, which suggests growth of 8.7% from the figure reported in the prior-year quarter.
Although the Zacks Consensus Estimate for Church & Dwight’s quarterly earnings has moved up by a penny over the past 30 days to 68 cents per share, it suggests a decline of 10.5% from the year-ago quarter’s reported number. CHD delivered an earnings surprise of 12.1%, on average, in the trailing four quarters.
Monster Beverage MNST currently has an Earnings ESP of +1.98% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports third-quarter 2023 results. The Zacks Consensus Estimate for Monster Beverage’s quarterly revenues is pegged at $1.9 billion, suggesting growth of 14.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Monster Beverage’s quarterly earnings has remained unchanged in the past 30 days at 40 cents per share, which indicates 33.3% growth from the year-ago quarter's reported number. MNST delivered an earnings surprise of 2.2%, on average, in the trailing four quarters.
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Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report
Monster Beverage Corporation (MNST) : Free Stock Analysis Report
Kraft Heinz Company (KHC) : Free Stock Analysis Report
e.l.f. Beauty (ELF) : Free Stock Analysis Report
