The Kraft Heinz Company Q3 Earnings: Key Factors to Consider

The Kraft Heinz Company (KHC) is set to announce its third-quarter earnings for 2024 on October 30. Analysts expect the company to report a decline in revenue due to ongoing challenges in the consumer market. The consensus estimate predicts revenues of $6.43 billion, indicating a decrease of 2.2% compared to the same period last year. On the other hand, the company’s earnings per share are anticipated to rise slightly. The earnings estimate remains steady at 74 cents per share, which is a 2.8% increase from the earnings reported for the same quarter a year earlier. KHC has managed to maintain a positive trend, with an average earnings surprise of 4.7% over the past four quarters.

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Factors Impacting KHC's Upcoming Earnings

The Kraft Heinz Company is facing a challenging consumer environment characterized by slower growth in incomes, dwindling savings, and ongoing inflation concerns. These factors have led to a dip in consumer confidence, further emphasizing value-driven purchasing behaviors. This situation has resulted in slower recovery rates across the industry, which raises concerns regarding KHC's sales volume performance for the upcoming quarter.

Analytical projections indicate a 0.9% decline in organic sales for the third quarter, with an expected volume decrease of 1.3%.

On a more positive note, KHC has been implementing pricing strategies that have helped maintain its profit margins despite these inflationary pressures. Analysts anticipate a 0.4% increase in pricing for the quarter and a potential 50 basis point improvement in adjusted gross margins. Additionally, KHC has focused on productivity enhancements through initiatives like Agile@Scale and strategic partnerships that have played a crucial role in its ongoing performance.

Earnings Predictions for KHC

Current projections do not provide strong indicators for an earnings beat for The Kraft Heinz Company this quarter. Typically, combinations of positive Earnings Surprise Percent (ESP) and a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) increase the likelihood of beating estimates; however, KHC currently holds a Zacks Rank of 4 (Sell) with an ESP of -0.69%.

Investors interested in enhancing their portfolios can look for other companies that present more favorable indicators.

Companies to Consider with Positive Earnings Outlooks

For those seeking potential investment opportunities, several companies currently show an advantageous combination of factors for exceeding earnings expectations.

Clorox (CLX) has an Earnings ESP of +2.41% and a Zacks Rank of 2. The company is expected to show both revenue and earnings growth when it reports its first-quarter fiscal 2025 results, with a consensus revenue estimate of $1.62 billion—reflecting a 17.2% year-over-year increase. Additionally, Clorox’s expected earnings of $1.36 per share represent a remarkable growth of 177.6% from last year.

Colgate-Palmolive (CL) currently holds an Earnings ESP of +0.96% and a Zacks Rank of 3. The company is anticipated to achieve growth in both revenues and earnings when its third-quarter results are released, with consensus revenue estimates at $5 billion and earnings expected to reach 88 cents per share. This represents year-over-year growth of 1.9% and 2.3% respectively.

Mondelez International (MDLZ) has an Earnings ESP of +0.80% and holds a Zacks Rank of 3. The company is projected to deliver growth in both top and bottom lines when its second-quarter results are announced, with consensus revenues pegged at $9.1 billion—it marks a modest increase of 0.4% from the previous year. Their earnings estimate remains at 84 cents per share, which indicates growth of 2.4% from the previous year, after achieving an average earnings surprise of 7.8% over the last four quarters.

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