Kraft Heinz beat third-quarter revenue expectations on Thursday, as consumers bought more of its packaged foods and condiments for at-home cooking, sending its shares up about 4% in premarket trading.
The pandemic-led spurt in demand has been a boon for Kraft, which has been struggling with weak sales and was forced to write down the value of several brands by billions of dollars over the past two years.
The company, known for brands from Philadelphia cream cheese to Heinz ketchup, said quarterly sales grew 6% to $6.44 billion, beating analysts' average estimate of $6.32 billion, according to Refinitiv data.
Sales in the United States, its biggest market, rose 7.4%, helped by a 4 percentage point hike in prices due to reduced promotional activity compared to a year earlier and as a step to offset higher dairy prices.
To save $2 billion by 2024 and halt weak sales, Kraft last month said it would sell its natural cheese business to French dairy company Groupe Lactalis for $3.2 billion, step up its marketing budget and overhaul its supply chain.
It took a non-cash loss of $300 million related to the sale of its cheese businesses in the quarter.
Compared to its peers, Kraft generated the highest increase in sales over the past 12 weeks at U.S. retail stores. It rose 9.8% for Kraft, 5% for Kellogg and 8.7% for General Mills, according to data provided to Guggenheim by Nielsen.
Organic sales, which strips off impacts from M&A and currency fluctuations, rose 6.3% in the quarter and the company said it continues to expect mid-single-digit organic sales growth for the fourth quarter.
For the full year, Kraft raised its forecast for adjusted core earnings to high single digits from mid-single-digits.
Excluding items, the Chicago-based company earned 70 cents per share in the reported quarter.