Kraft Heinz Company, listed on Nasdaq under KHC, has disclosed its financial outcomes for the fourth quarter and entire fiscal year 2023. The report highlights various aspects of its performance across different metrics.
In terms of net sales, there was a modest increase of 0.6% for the full year, with Organic Net Sales experiencing a more significant rise of 3.4%. However, it’s worth noting that these figures were affected by a negative 1.8 percentage point impact from the presence of a 53rd week in the prior year. Gross profit margins showed improvement, rising by 280 basis points to 33.5%, while Adjusted Gross Profit Margin increased by 240 basis points to 33.7%. Net income exhibited notable growth of 20.2%, with Adjusted EBITDA also showing a positive trend, increasing by 5.1%. However, similar to net sales, these figures were influenced by a negative 2.1 percentage point impact from the 53rd week in the prior year. Diluted EPS reached $2.31, marking a 20.9% increase, while Adjusted EPS rose to $2.98, up by 7.2%. Again, these figures were impacted by the additional week in the prior year, which had a negative 2.4 percentage point effect.
For the full year, the Company managed to achieve its target Net Leverage ratio of approximately 3.0x.
In the fourth quarter, the picture was somewhat different. Net sales decreased by 7.1%, primarily due to the negative impact of a 53rd week in the prior year, which accounted for 6.1 percentage points of the decline. Organic Net Sales also experienced a slight decrease of 0.7%. Despite the decrease in net sales, the gross profit margin increased by 180 basis points to 33.8%, and Adjusted Gross Profit Margin saw a more substantial increase of 260 basis points to 34.8%. However, net income decreased by 14.6%, with Adjusted EBITDA also showing a decline of 5.3%. Diluted EPS for the quarter was $0.61, down by 15.3%, and Adjusted EPS was $0.78, representing a decrease of 8.2%. Similar to the full-year results, these declines were partly attributed to the negative impact of the 53rd week in the prior year.
In November 2023, the Company announced a share repurchase program totaling $3.0 billion.
CEO Carlos Abrams-Rivera expressed satisfaction with the Company’s overall performance in 2023, highlighting growth in net sales across key segments and successful execution of efficiency programs. He also acknowledged the challenges faced in the fourth quarter due to consumer pressure, particularly related to SNAP benefit reductions, but expressed optimism for continued growth in 2024. He emphasized a strong focus on executing their strategy, backed by investments in brands and personnel, to deliver profitable growth and create value for stockholders.
