The Kraft Heinz Company Q3 Earnings: Key Factors to Watch

The Kraft Heinz Company (KHC - Free Report) is expected to report a decline in its revenue for the third quarter of 2024, with results scheduled to be announced on October 30. According to the Zacks Consensus Estimate, the company's revenue is projected to be $6.43 billion, which represents a decrease of 2.2% compared to the same quarter last year. However, earnings per share are expected to increase year-over-year. The consensus estimate for KHC’s earnings stands at 74 cents per share, reflecting a slight rise of 2.8% from the previous year. Historically, KHC has had an average earnings surprise of 4.7% over the past four quarters.

Factors to Consider Ahead of KHC’s Results

The Kraft Heinz Company is currently facing challenges due to the tough consumer environment. Issues such as slower income growth, a decline in savings, and ongoing inflation have affected consumer sentiment, leading many to prioritize value in their purchases. This challenging landscape has slowed the recovery in the market, causing KHC to contend with weak volume sales. Our analysis suggests a projected decline of 0.9% in organic sales for the third quarter, alongside a 1.3% decrease in volumes.

Despite these hurdles, KHC has been able to implement effective pricing strategies that are expected to help enhance its performance and maintain strong margins amid inflation pressures. We anticipate a 0.4% increase in pricing for the quarter, along with an adjusted gross margin expansion of 50 basis points. KHC's focus on productivity improvements, such as its Agile@Scale program and strategic partnerships, has been key to its success.

Earnings Expectations for KHC

Based on our model, the outlook for an earnings beat for The Kraft Heinz Company in this quarter is unclear. A combination of a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) would typically enhance the chances of an earnings surprise. However, KHC currently holds a Zacks Rank of #4 (Sell) and has an Earnings ESP of -0.69%. Interested investors can explore the best stocks to buy or sell prior to their earnings reports using our Earnings ESP Filter.

Stocks with a Favorable Outlook

Some companies that currently feature a favorable combination of metrics, increasing their chances for an earnings beat this quarter include:

Clorox (CLX - Free Report) boasts an Earnings ESP of +2.41% and a Zacks Rank of 2. The company is projected to report growth in both its top and bottom lines for its first quarter of fiscal 2025, with revenue estimates of $1.62 billion—reflecting a 17.2% increase from last year’s figures. The consensus forecast for Clorox’s earnings is at $1.36 per share, indicating a remarkable growth of 177.6% from the prior year. Additionally, CLX has a remarkable trailing four-quarter earnings surprise percentage of 122.9%.

Colgate-Palmolive (CL - Free Report) has an Earnings ESP of +0.96% and holds a Zacks Rank of 3. The company is also anticipated to show growth in its revenues, estimated at $5 billion for the third quarter of 2024, an increase of 1.9% year-over-year. With a consensus estimate of 88 cents per share for quarterly earnings, CL is expected to see a growth of 2.3% compared to the last year. The company has delivered an average earnings surprise of 4.8% over its previous four quarters.

Mondelez International (MDLZ - Free Report) currently has an Earnings ESP of +0.80% and is ranked at #3. Mondelez is anticipated to achieve growth in both its revenue and earnings when it reports its second quarter results for 2024. The expected revenue is $9.1 billion, a nearly 0.4% rise compared to the same time last year. The consensus for Mondelez's earnings has remained steady at 84 cents per share, suggesting a growth of 2.4% from last year’s performance. MDLZ has averaged an earnings surprise of 7.8% over its preceding four quarters.

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