Kraft Heinz has raised its full-year profit forecast and reported “strong results,” following product price hikes.
In its first quarter results, the food company saw a 7.3% increase in net sales to £5.1 billion, with organic net sales up 9.4% from the same period in 2022, as its portfolio saw price rises of 14.7%.
In January, Heinz raised its prices for the second time in less than a year, following its public dispute with Tesco over passing increased production costs onto customers, despite the ongoing cost-of-living crisis.
However as a result of these price hikes, sales volumes dropped 5.3% which the group said was driven by elasticity impacts from pricing actions.
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According to reporting by Reuters, Heinz has said it will abandon further price hikes for its quick-fix meals and condiments.
The company’s adjusted EBITDA was up 10.3% to £1.1bn driven by higher pricing and efficiency gains and has raised its constant currency adjusted EBITDA outlook.
Due to having “delivered strong results in the first quarter of 2023,” expectations have now lifted to 6% to 8%, up from 4% to 6%.
“I am very proud of the entire Kraft Heinz team as we continue to deliver on what we can control by unlocking efficiencies and reinvesting in our brands and capabilities,” Kraft Heinz CEO and chair of the board, Miguel Patricio said.
“Our team’s continued focus on executing against the strategy is coming to fruition, but it’s not time to declare victory just yet.”
He added that looking ahead, Kraft Heinz remains “committed to advancing our business transformation, and we are confident we have the right strategy in place to win with customers and consumers, and to deliver profitable growth and create value for our stockholders.”