On November 1, 2023, The Kraft Heinz Co (KHC, Financial) released its financial results for the third quarter of 2023. The company reported a 1.0% increase in net sales and a 1.7% increase in Organic Net Sales. However, net income decreased by 41.7%, while Adjusted EBITDA increased by 11.9%. The Diluted EPS was $0.21, down by 40.0%, while Adjusted EPS was $0.72, up by 14.3%. The company also reached its target Net Leverage ratio of approximately 3.0x, with Net Leverage at 2.9x.
Financial Performance
For the third quarter, net sales increased by 1.0% to $6.6 billion, including a negative 0.5 percentage point impact from foreign currency and a negative 0.2 percentage point impact from divestitures. Organic Net Sales increased by 1.7% versus the prior year period. Net income decreased by 41.7% to $254 million, primarily driven by higher non-cash impairment losses and higher tax expenses in the current year period. Adjusted EBITDA increased by 11.9% to $1.6 billion, primarily driven by higher pricing and efficiency gains.
Leadership and Organizational Changes
The Kraft Heinz Co (KHC, Financial) announced leadership and organizational changes as part of its mission to accelerate profitable growth and to lead the future of food. Pedro Navio has been named EVP & President, North America, succeeding Carlos Abrams-Rivera who will serve as the Kraft Heinz CEO. The company is also establishing global leadership teams for its Growth and Omnichannel functions and restructuring its International Zone.
Outlook
For fiscal year 2023, the company expects Organic Net Sales growth of 4 to 6 percent versus the prior year, closer to the lower end of the range at approximately 4%. Constant Currency Adjusted EBITDA growth of 5 to 7 percent versus the prior year, or 7 to 9 percent when excluding the impact from lapping a 53rd week in 2022. Adjusted EPS is expected to be in the range of $2.91 to $2.99, compared to the previous range of $2.83 to $2.91.
Explore the complete 8-K earnings release (here) from The Kraft Heinz Co for further details.
