Here's How Kraft Heinz (KHC) Looks Ahead of Q2 Earnings

The Kraft Heinz Company KHC is likely to register a slight improvement in the top line when it reports second-quarter 2020 numbers on Jul 30, before market open. The Zacks Consensus Estimate for revenues is pegged at $6,438 million, which indicates an improvement of 0.5% from the prior-year quarter’s reported figure.

However, the company’s bottom line is expected to decline year over year. The Zacks Consensus Estimate for second-quarter 2020 earnings is pegged at 63 cents per share, which suggests 19.2% drop from the year-ago quarter’s reported figure. The projection has been unchanged in the past 30 days.

Notably, this leading provider of consumer packaged food and beverages has a trailing four-quarter earnings surprise of 11.9%, on average.

The Kraft Heinz Company Price and EPS Surprise

The Kraft Heinz Company Price and EPS Surprise

The Kraft Heinz Company price-eps-surprise | The Kraft Heinz Company Quote

Factors to Note

Kraft Heinz is witnessing a spike in demand from retail customers owing to greater at-home consumption trends amid the coronavirus outbreak. For second-quarter 2020 management expects a low to mid-single digit year-over-year organic net sales growth. Further, the company anticipates a mid-single digit adjusted EBITDA growth on a constant-currency basis in the second quarter.

Notably, the company’s strategic endeavors such as efficient pricing strategy, enhancement of supply chain and product development are noteworthy. Apart from this, Kraft Heinz has been undertaking efforts to boost the e-commerce channel.

However, Kraft Heinz is struggling with higher expenses. The company has been incurring additional costs to keep its business operating amid the coronavirus crisis. These costs include incentives paid to the company’s front-line workers along with costs related to various other equipments that are required amid the crisis. Also, the impact of sluggish demand in foodservice channels worldwide amid the pandemic as well as adverse currency fluctuation cannot be ignored.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict a beat for Kraft Heinz this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Kraft Heinz has a Zacks Rank #2, it has an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Nu Skin Enterprises NUS currently has an Earnings ESP of +6.35% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Clorox Company CLX has an Earnings ESP of +0.59% and a Zacks Rank #2.

B&G Foods BGS currently has an Earnings ESP of +1.56% and a Zacks Rank of 2.

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The Clorox Company (CLX): Free Stock Analysis Report

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BG Foods, Inc. (BGS): Free Stock Analysis Report

The Kraft Heinz Company (KHC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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