The Kraft Heinz Company (KHC) Bundle
A Brief History of The Kraft Heinz Company
Company Overview
The Kraft Heinz Company (KHC), formed in 2015 through the merger of Kraft Foods Group and H.J. Heinz Company, operates as one of the largest food and beverage companies globally, with a diverse portfolio of brands.
Financial Performance
As of September 28, 2024, Kraft Heinz reported a net sales of $19.27 billion for the nine months ended, a decrease of 2.6% compared to $19.78 billion for the same period in 2023. The decline was attributed to unfavorable impacts of foreign currency and changes in acquisitions and divestitures.
| Metric | 2024 (Nine Months Ended) | 2023 (Nine Months Ended) | % Change |
|---|---|---|---|
| Net Sales | $19.27 billion | $19.78 billion | -2.6% |
| Operating Income | $1.723 billion | $3.272 billion | -47.3% |
| Net Income | $614 million | $2.089 billion | -70.6% |
| Adjusted Operating Income | $3.975 billion | $3.908 billion | +1.7% |
Stock Performance
Kraft Heinz's stock price has experienced volatility, with a current diluted earnings per share (EPS) of $0.50 for the nine months ended September 28, 2024, down from $1.70 in the previous year, reflecting a 70.6% decrease.
| Period | Diluted EPS | % Change |
|---|---|---|
| Q3 2024 | $(0.24) | -214.3% |
| Q3 2023 | $0.21 | N/A |
| Year-to-Date 2024 | $0.50 | -70.6% |
| Year-to-Date 2023 | $1.70 | N/A |
Impairment Losses
Kraft Heinz reported significant impairment losses, totaling $2.282 billion for the nine months ended September 28, 2024, compared to $662 million in the prior year, primarily affecting goodwill and intangible assets.
| Type of Impairment | 2024 (Nine Months Ended) | 2023 (Nine Months Ended) |
|---|---|---|
| Goodwill Impairment | $1.561 billion | $0.510 billion |
| Intangible Asset Impairment | $721 million | $152 million |
Debt and Equity
Kraft Heinz's long-term debt stood at $20.1 billion as of September 28, 2024, with total equity reported at $48.463 billion. The company declared dividends totaling $1.452 billion for the nine months ended September 28, 2024.
| Metric | As of September 28, 2024 |
|---|---|
| Long-term Debt | $20.1 billion |
| Total Equity | $48.463 billion |
| Dividends Paid | $1.452 billion |
Operational Changes
In 2024, Kraft Heinz realigned its product management strategy into eight consumer-driven platforms to enhance operational efficiency and market responsiveness.
Conclusion
As of 2024, Kraft Heinz continues to navigate challenges in market dynamics, financial performance, and operational restructuring while maintaining a focus on its broad portfolio of brands.
A Who Owns The Kraft Heinz Company (KHC)
Major Shareholders
The Kraft Heinz Company (KHC) has a diverse ownership structure consisting of institutional investors, mutual funds, and individual shareholders. As of 2024, the following table outlines the major shareholders:
| Shareholder | Ownership Percentage | Number of Shares (millions) | Type of Ownership |
|---|---|---|---|
| Warren Buffett (Berkshire Hathaway) | 26.6% | 325.5 | Institutional |
| 3G Capital | 24.0% | 292.2 | Private Equity |
| Vanguard Group | 8.1% | 98.5 | Institutional |
| BlackRock, Inc. | 7.5% | 91.5 | Institutional |
| State Street Corporation | 4.9% | 59.8 | Institutional |
Stock Performance
The stock performance of Kraft Heinz has shown fluctuations, reflecting broader market trends and company-specific developments. The following table presents key financial metrics:
| Metric | Value |
|---|---|
| Current Stock Price (as of September 28, 2024) | $30.15 |
| Market Capitalization | $37.1 billion |
| 52-Week High | $38.40 |
| 52-Week Low | $28.50 |
| Year-to-Date Performance | -15.3% |
Insider Ownership
Insider ownership plays a significant role in the governance of Kraft Heinz. The following table summarizes the ownership stakes of key executives and board members:
| Name | Position | Ownership Percentage | Number of Shares (millions) |
|---|---|---|---|
| Miguel Patricio | CEO | 0.5% | 0.6 |
| David Knopf | CFO | 0.2% | 0.2 |
| Board Members | Various | 0.3% | 0.4 |
Institutional Ownership Trends
Institutional ownership is a crucial indicator of investment confidence in Kraft Heinz. The following table highlights recent trends in institutional ownership:
| Quarter | Institutional Ownership Percentage | Change from Previous Quarter |
|---|---|---|
| Q1 2024 | 66.1% | -2.4% |
| Q2 2024 | 65.8% | -0.3% |
| Q3 2024 | 66.5% | +0.7% |
Dividends
Kraft Heinz has a history of paying dividends to its shareholders. The following table summarizes the dividend payments:
| Year | Dividend per Share | Total Dividends Paid (millions) |
|---|---|---|
| 2024 | $1.60 | $1,452 |
| 2023 | $1.60 | $1,474 |
| 2022 | $1.60 | $1,488 |
Conclusion on Ownership Dynamics
The ownership structure of Kraft Heinz is characterized by significant institutional investment, with key shareholders such as Berkshire Hathaway and 3G Capital holding substantial stakes. The company's performance and strategic decisions continue to influence shareholder sentiment and stock price movements.
The Kraft Heinz Company (KHC) Mission Statement
Mission Statement Overview
The Kraft Heinz Company aims to be the most trusted and preferred food company in the world, delivering quality products to the consumers. The mission emphasizes a commitment to innovation, sustainability, and community engagement.
Financial Performance Indicators
Kraft Heinz has reported significant financial metrics that reflect its operational effectiveness and market position.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $6.383 billion | $6.570 billion | (2.8)% |
| Organic Net Sales | $6.399 billion | $6.543 billion | (2.2)% |
| Operating Income | $(101) million | $653 million | (115.5)% |
| Net Income | $(290) million | $254 million | (214.2)% |
| Adjusted Operating Income | $1.330 billion | $1.312 billion | 1.4% |
| Diluted EPS | $(0.24) | $0.21 | (214.3)% |
Sales Breakdown by Segment
The sales performance across different segments illustrates the varied dynamics within the company.
| Segment | Q3 2024 Net Sales | Q3 2023 Net Sales | Change (%) |
|---|---|---|---|
| North America | $4.826 billion | $4.995 billion | (3.4)% |
| International Developed Markets | $882 million | $883 million | (0.2)% |
| Emerging Markets | $675 million | $692 million | (2.4)% |
Year-to-Date Financial Performance
For the nine months ended September 28, 2024, Kraft Heinz's financial metrics reflect ongoing challenges and strategic adjustments.
| Financial Metric | 9 Months 2024 | 9 Months 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $19.270 billion | $19.780 billion | (2.6)% |
| Organic Net Sales | $19.332 billion | $19.671 billion | (1.7)% |
| Operating Income | $1.723 billion | $3.272 billion | (47.3)% |
| Net Income | $614 million | $2.089 billion | (70.6)% |
| Adjusted Operating Income | $3.975 billion | $3.908 billion | 1.7% |
Strategic Focus Areas
- Innovation: Developing new products and enhancing existing ones to meet consumer demands.
- Sustainability: Committing to sustainable practices throughout the supply chain.
- Community Engagement: Investing in local communities and promoting healthier food options.
Market Trends and Challenges
The company faces challenges including inflationary pressures, changing consumer preferences, and competitive dynamics in the food industry.
| Challenge | Impact |
|---|---|
| Inflationary Pressures | Increased input costs affecting pricing strategies. |
| Changing Consumer Preferences | Need for adaptation in product offerings to meet health and wellness trends. |
| Competitive Dynamics | Intensified competition impacting market share and pricing power. |
How The Kraft Heinz Company (KHC) Works
Overview of Operations
The Kraft Heinz Company operates in three primary segments: North America, International Developed Markets, and Emerging Markets. As of September 28, 2024, the company's total net sales amounted to $19.27 billion, reflecting a 2.6% decrease compared to $19.78 billion for the same period in 2023.
| Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | Change (%) |
|---|---|---|---|
| North America | $14.58 billion | $14.96 billion | (2.6)% |
| International Developed Markets | $2.62 billion | $2.68 billion | (2.0)% |
| Emerging Markets | $2.07 billion | $2.15 billion | (3.4)% |
Financial Performance
For the nine months ended September 28, 2024, the company reported an operating loss of $101 million, significantly down from an operating income of $653 million for the same period in 2023. Net income for the same period was $614 million, a decrease of 70.6% compared to $2.09 billion in 2023.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Operating Income/(Loss) | $(101) million | $653 million | (115.5)% |
| Net Income/(Loss) | $(290) million | $254 million | (214.2)% |
| Adjusted Operating Income | $1.33 billion | $1.31 billion | 1.4% |
Sales Analysis
For the three months ended September 28, 2024, net sales decreased by 2.8% to $6.38 billion, compared to $6.57 billion for the same period in 2023. Organic net sales also fell by 2.2% during the same period. The primary drivers included unfavorable volume/mix and foreign currency impacts.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Net Sales | $6.38 billion | $6.57 billion | (2.8)% |
| Organic Net Sales | $6.40 billion | $6.54 billion | (2.2)% |
Segment Performance
In the North America segment, net sales were $14.58 billion for the nine months ended September 28, 2024, a decrease from $14.96 billion in 2023. The International Developed Markets segment generated $2.62 billion, down from $2.68 billion. Emerging Markets saw sales decrease to $2.07 billion from $2.15 billion.
| Segment | Net Sales (Nine Months Ended) | 2024 | 2023 | Change (%) |
|---|---|---|---|---|
| North America | $14.58 billion | $14.96 billion | (2.6)% | |
| International Developed Markets | $2.62 billion | $2.68 billion | (2.0)% | |
| Emerging Markets | $2.07 billion | $2.15 billion | (3.4)% |
Cash Flow and Liquidity
For the nine months ended September 28, 2024, Kraft Heinz reported net cash provided by operating activities of $2.8 billion, up from $2.6 billion in the prior year. The net cash used for investing activities was $849 million, compared to $738 million in 2023.
| Cash Flow Activity | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $2.8 billion | $2.6 billion |
| Net Cash Used for Investing Activities | $849 million | $738 million |
Debt and Equity Management
Kraft Heinz's total equity as of September 28, 2024, stood at $48.46 billion, a decrease from $49.02 billion at the end of 2023. The company repurchased shares worth approximately $204 million during the period.
| Equity Metrics | September 28, 2024 | December 30, 2023 |
|---|---|---|
| Total Equity | $48.46 billion | $49.02 billion |
| Common Stock Repurchased | $204 million | N/A |
Market Position and Outlook
Despite the challenges faced in 2024, including a decline in consumer demand and increased operational costs, Kraft Heinz continues to implement efficiency initiatives and pricing strategies to mitigate impacts. The company remains focused on leveraging its portfolio and expanding into emerging markets.
How The Kraft Heinz Company (KHC) Makes Money
Revenue Sources
The Kraft Heinz Company generates revenue primarily through the sale of food and beverage products across various segments including North America, International Developed Markets, and Emerging Markets. The breakdown of net sales for the nine months ended September 28, 2024, is as follows:
| Segment | Net Sales (in millions) | Year-over-Year Change (%) |
|---|---|---|
| North America | $14,575 | (2.6) |
| International Developed Markets | $2,622 | (2.0) |
| Emerging Markets | $2,073 | (3.4) |
| Total Kraft Heinz | $19,270 | (2.6) |
Organic Net Sales Performance
For the nine months ended September 28, 2024, organic net sales were influenced by various factors, including pricing strategies and volume/mix changes. The organic net sales figures are as follows:
| Segment | Organic Net Sales (in millions) | Year-over-Year Change (%) |
|---|---|---|
| North America | $14,590 | (2.5) |
| International Developed Markets | $2,612 | (2.4) |
| Emerging Markets | $2,130 | 4.6 |
| Total Kraft Heinz | $19,332 | (1.7) |
Cost of Goods Sold and Gross Profit
The cost of goods sold (COGS) for the nine months ended September 28, 2024, was as follows:
| Metric | Amount (in millions) |
|---|---|
| Cost of Products Sold | $12,547 |
| Gross Profit | $6,723 |
Operating Income and Adjusted Operating Income
Operating income for Kraft Heinz has shown fluctuations due to various factors including impairment losses. The operating and adjusted operating income for the nine months ended September 28, 2024, is detailed below:
| Metric | Amount (in millions) |
|---|---|
| Operating Income | $1,723 |
| Adjusted Operating Income | $3,975 |
Net Income and Earnings Per Share (EPS)
The net income attributable to common shareholders for the nine months ended September 28, 2024, reflects a significant decrease compared to the prior year:
| Metric | Amount (in millions) |
|---|---|
| Net Income | $614 |
| Diluted EPS | $0.50 |
Key Financial Ratios
The following key financial ratios provide insights into Kraft Heinz's profitability and efficiency:
| Ratio | Value |
|---|---|
| Gross Margin (%) | 34.9 |
| Operating Margin (%) | 8.9 |
| Net Margin (%) | 3.2 |
Segment Performance Breakdown
The performance of each segment for the nine months ended September 28, 2024, is summarized below:
| Segment | Net Sales (in millions) | Adjusted Operating Income (in millions) |
|---|---|---|
| North America | $14,575 | $3,793 |
| International Developed Markets | $2,622 | $397 |
| Emerging Markets | $2,073 | $232 |
Cash Flow Activities
The cash flow activities for the nine months ended September 28, 2024, are as follows:
| Cash Flow Activity | Amount (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $2,796 |
| Net Cash Used for Investing Activities | ($849) |
| Net Cash Used for Financing Activities | ($2,046) |
The Kraft Heinz Company (KHC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- The Kraft Heinz Company (KHC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Kraft Heinz Company (KHC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Kraft Heinz Company (KHC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.