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Factors to Know Ahead of Kraft Heinz (KHC) Q1 Earnings

Zacks Equity Research

The Kraft Heinz Company KHC is scheduled to report first-quarter 2020 financial results on Apr 30, before the market opens. In the trailing three quarters, the company’s bottom line outperformed the Zacks Consensus Estimate by 13.4%, on average. In the last reported quarter, the company beat the consensus mark by 5.9%.

We note that the Zacks Consensus Estimate for earnings for the quarter under review has moved up by 10.2% over the past 30 days to 54 cents. The Zacks Consensus Estimate for revenues is pegged at $6,142 million.

The Kraft Heinz Company Price, Consensus and EPS Surprise

The Kraft Heinz Company Price, Consensus and EPS Surprise

The Kraft Heinz Company price-consensus-eps-surprise-chart | The Kraft Heinz Company Quote

Key Things to Note

In a recent press release, Kraft Heinz notified that it has been witnessing higher consumer demand for its products. This can be attributed to panic-induced stockpiling amid the coronavirus outbreak. Impressively, for first-quarter 2020 management expects net sales increase of nearly 3% year over year. Further, the company anticipates organic net sales growth of approximately 6% in the quarter to be reported. The company had earlier envisioned a low single-digit decline in organic net sales for the first quarter.

However, the company informed that it does not expect benefits from increased sales to flow through to net income/(loss) from continuing operations, adjusted EBITDA as well as earnings per share in the first quarter. This is due to additional expenses incurred to support growth. Also, we note that key commodity cost inflation and increase in manufacturing expenses remain concerns.

Nonetheless, the company’s strategic endeavors such as efficient pricing strategy, enhancement of supply chain and product development are noteworthy. Further, it has been undertaking efforts to boost the e-commerce channel.

What the Zacks Model Unveils

Our proven model does not conclusively predict a beat for Kraft Heinz this earnings season. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Kraft Heinz has a Zacks Rank #2, it has an Earnings ESP of -0.13%.

3 Stocks With a Favorable Combination

Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Hain Celestial HAIN has an Earnings ESP of +9.24% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Campbell Soup Company CPB has an Earnings ESP of +21.06% and a Zacks Rank #2.

Flowers Foods FLO has an Earnings ESP of +7.77% and a Zacks Rank #3.

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The Hain Celestial Group, Inc. (HAIN) : Free Stock Analysis Report
Campbell Soup Company (CPB) : Free Stock Analysis Report
Flowers Foods, Inc. (FLO) : Free Stock Analysis Report
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
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