Published by Jessica Weisman-Pitts
Posted on October 30, 2024
2 min readLast updated: January 29, 2026
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By Savyata Mishra
(Reuters) -Kraft Heinz on Wednesday tempered its annual forecasts for organic sales and profit as repeated price hikes hurt demand for the packaged food giant’s branded products such as Lunchables meal kits.
Shares of the Jell-O maker fell more than 3% in early trading, as it also posted a bigger-than-expected drop in revenue for the third quarter.
Steep declines in a few brands are holding back overall results. Lunchables, in particular, has been the largest drag on sales, and Kraft Heinz may need to accelerate investments to turn this business around,” said CFRA Research analyst Arun Sundaram.
Company executives said the negative publicity surrounding Lunchables appears to be lingering longer. Earlier in April, a consumer watchdog group warned that the kid’s meal kit brand contained too much lead and sodium.
Earlier this month, Reuters reported Brazilian meatpacker JBS and Mexico’s Sigma Alimentos were among bidders competing to acquire Oscar Mayer, which includes Lunchables.
Kraft Heinz expects a slower recovery for the brand due to an upstream supplier issue that led to a 15% quarterly decline in sell-out, or sales to consumers at retailers.
Following price hikes over the last few years, Kraft Heinz has turned to promotions as value-seeking consumers cut back spending on packaged food items such as Capri Sun and Mac & Cheese.
Overall volumes at the company declined 3.4 percentage points, with prices rising by 1.2 percentage points in the quarter.
Customers have pivoted to cheaper, private-label alternatives, prompting packaged food makers like Kraft Heinz to reduce prices in the U.S. on some items such as sauces and mayonnaise.
The company forecast annual organic net sales to be at the low end of its earlier range of flat to down 2% from last year, while adjusted profit per share is now expected to be at the low end of its prior range of $3.01 to $3.07.
It earned 75 cents per share on an adjusted basis in the third quarter, beating analysts’ estimates of 74 cents, according to data compiled by LSEG.
Net sales fell 2.8% to $6.38 billion, compared with estimates of $6.42 billion.
(Reporting by Savyata Mishra in Bengaluru; Editing by Devika Syamnath)
Organic sales refer to the revenue generated from a company's existing operations, excluding any sales from newly acquired businesses or external factors. It reflects the company's growth based on its core business activities.
Profit per share (EPS) is a financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock. It is calculated by dividing net income by the number of shares outstanding.
Price hikes refer to increases in the selling prices of goods or services. Companies may implement price hikes to offset rising costs or to improve profit margins, but they can also affect consumer demand.
Revenue is the total income generated by a company from its business activities, such as sales of goods or services, before any expenses are deducted. It is a key indicator of a company's financial performance.
Branded products are goods or services that are marketed under a specific brand name. They often carry a reputation and identity that distinguishes them from competitors, influencing consumer preference and loyalty.
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