# Kraft Heinz plans more price hikes as sales, earnings beat estimates
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-02-16
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Kraft Heinz to Raise Prices on Snacks and Condiments as
Meta Description: Kraft Heinz Co is increasing prices on snacks and condiments to combat rising raw material and transportation costs. Quarterly earnings exceed expectations.
URL: https://financedigest.com/kraft-heinz-plans-more-price-hikes-as-sales-earnings-beat-estimateshtml

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By Deborah Mary Sophia and Mehr Bedi

(Reuters) -Kraft Heinz Co said on Wednesday it would raise the prices of its snacks and condiments further to counter soaring costs of raw materials and transportation, after posting quarterly earnings above market expectations.

Shares of the Chicago-based company rose as much as about 6% in morning trading.

Packaged [food makers were among the biggest pandemic winners last year as stuck-at-home consumers](https://www.financedigest.com/france-leans-on-retailers-to-help-consumers-cope-with-food-prices.html "France leans on retailers to help consumers cope with food prices") stockpiled on frozen meals, sauces and soups.

A strained [supply chain](https://www.financedigest.com/ge-shares-slump-as-supply-chain-inflationary-woes-threaten-profit-outlook.html "GE shares slump as supply chain, inflationary woes threaten profit outlook"), however, has driven up freight and labor expenses and aggravated problems for companies like Kraft, Conagra and Kellogg that are grappling with surging costs of grains, meat and edible oils.

Kraft Heinz is doing a better job of navigating rising costs and driving demand than we thought,” Edward Jones analyst John Boylan said, adding that the company has laid a good foundation by lowering costs and [divesting sluggish businesses](https://www.financedigest.com/pizza-firm-dp-eurasia-considers-divestment-of-russian-business.html "Pizza firm DP Eurasia considers divestment of Russian business").

Kraft, whose [brands include Philadelphia Cream](https://www.financedigest.com/10-million-to-be-whipped-into-ice-cream-brand-four-winters-following-acquisition.html " Million To Be Whipped Into Ice Cream Brand Four Winters Following Acquisition ") Cheese and Heinz ketchup, said it raised prices by 3.8 percentage points in the fourth quarter when demand for its products was also robust. Margins in 2021, as a result, were higher than in pre-pandemic 2019.

The company expects inflation to be in the low-teens percentage range for 2022, with higher levels in the first half than in the second, said [Chief Financial Officer](https://www.financedigest.com/host-analytics-appoints-chris-labruna-as-chief-revenue-officer.html "Host Analytics Appoints Chris LaBruna as Chief Revenue Officer") Paulo Basilio.

Kraft also [sees full-year organic sales](https://www.financedigest.com/switzerlands-clariant-sees-slight-sales-drop-in-2023.html "Switzerland’s Clariant sees slight sales drop in 2023") growing by a low-single-digit percentage, compared with a 1.8% rise in 2021.

Its net [sales declined 3.3% to $6.71 billion in the fourth quarter ended](https://www.financedigest.com/eu-approves-law-to-end-sales-of-new-co2-emitting-cars-by-2035.html "EU approves law to end sales of new CO2-emitting cars by 2035") Dec. 25, owing to some acquisitions and divestitures, but [beat the Refinitiv IBES estimate](https://www.financedigest.com/ibm-beats-first-quarter-profit-estimates-signals-demand-holding-up.html "IBM beats first-quarter profit estimates, signals demand holding up") of $6.61 billion.

[Excluding items](https://www.financedigest.com/myhermes-boosts-smes-by-revising-cover-model-and-excluded-items-list.html "MyHermes Boosts SMEs By Revising Cover Model And Excluded Items List"), Kraft earned 79 cents per share, beating analysts’ average estimate of 63 cents.

(Reporting by Deborah Sophia and Mehr Bedi in Bengaluru; Editing by Ramakrishnan M.)


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