Bottles of Heinz Tomato Ketchup, owned by the Kraft Heinz Company, go on sale in Queens, New York, U.S. November 16, 2021. REUTERS/Andrew Kelly/File Photo

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July 27 (Reuters) – Kraft Heinz Co (KHC.O) raised its forecast for annual organic sales growth on Wednesday and beat quarterly estimates, helped by higher prices for packaged meals and condiments from ketchup maker Heinz.

Pandemic-induced global supply chain disruptions and soaring raw material costs have forced Kraft Heinz, like other packaged food makers, to raise prices for its sodas and snacks, but some retailers are pushing back. now citing declining consumer demand.

Last month, Kraft stopped supplying certain products, such as tomato ketchup and baked beans, to Britain’s biggest supermarket group Tesco (TSCO.L), as the retailer refused to charge higher prices to customers at a time of high inflation.

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The two companies reached an agreement to bring Kraft’s products back to store shelves earlier this month. Read more

Kraft said Wednesday that a key measure of its sales volumes fell 2.3 percentage points in the second quarter, hurt by slowing demand due to higher prices and supply constraints.

Still, the Philadelphia-based cream cheese maker projects 2022 organic revenue to grow by a high single-digit percentage, compared to its earlier forecast of a mid-single-digit percentage increase.

Net sales fell about 1% to $6.55 billion in the second quarter ended June 25, but beat analysts’ estimates of $6.39 billion, according to IBES data from Refinitiv.

Excluding items, it earned 70 cents per share, above estimates of 68 cents per share.

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Reporting by Mehr Bedi in Bangalore; Editing by Saumyadeb Chakrabarty and Shailesh Kuber

Our standards: The Thomson Reuters Trust Principles.

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