© Reuters. FILE PHOTO: A Heinz Ketchup bottle sits between a field of Kraft macaroni and cheese and a bottle of Kraft Original Barbecue Sauce on a grocery retailer shelf in New York March 25, 2015. REUTERS/Brendan McDermid/File Photo
(Reuters) -Kraft Heinz Co raised its full-year core profit forecast on Wednesday, because the packaged meals maker expects sturdy demand and elevated product costs to counter inflation.
Shares of Kraft had been up about 2% in premarket buying and selling after the Chicago-based firm topped Wall Street estimates for third-quarter income and profit.
Kraft mentioned it expects sturdy pricing within the first half of 2022 to offset the escalating inflation, as at-home eating tendencies, which emerged throughout the pandemic, maintain up regardless of the reopening of dine-in eating places and bars.
Packaged meals corporations, which benefited final yr from a pandemic-driven pantry-stocking frenzy, have been wrestling with rising uncooked materials prices and freight bills because of provide chain disruptions brought on by the COVID-19 pandemic.
“2022 will remain a very fluid environment. That said, we continue to believe that, from a topline perspective, we will sustain stronger consumption versus pre-pandemic levels” Global Chief Financial Officer Paulo Basilio mentioned.
Kraft mentioned sturdy demand was outstripping its present capability to serve for some classes within the United States, and it was more likely to expertise the identical within the present vacation quarter.
The Philadelphia Cream Cheese maker forecast full-year natural gross sales to be flat in comparison with a earlier expectation of a low-single-digit proportion decline.
Kraft mentioned it expects full-year adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) to be over $6.2 billion, above its earlier estimate of at the least $6.1 billion.
Net gross sales within the third quarter ended Sept. 25 fell 1.8% to $6.32 billion, however beat analysts’ common estimate of $6.05 billion.
Excluding objects, Kraft earned 65 cents per share, additionally above estimates of 58 cents.
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