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Here's How Kraft Heinz (KHC) Looks Ahead of Q3 Earnings

The Kraft Heinz Company KHC is likely to register an improvement in the top line when it reports third-quarter 2020 numbers on Oct 29, before market open. The Zacks Consensus Estimate for revenues is pegged at $6.36 billion, which indicates an increase of 4.7% 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 third-quarter 2020 earnings is pegged at 63 cents per share, which suggests 8.7% drop from the year-ago quarter’s reported figure. Nevertheless, the projection has moved up by a cent in the past seven days.

Notably, this leading provider of consumer packaged food and beverages has a trailing four-quarter earnings surprise of 17.1%, on average.In the last reported quarter, the company delivered an earnings surprise of 25%.

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 third-quarter 2020, management expects organic net sales growth in mid-single-digit band compared with the year-ago quarter’s levels. Further, the company anticipates high-single-digit adjusted EBITDA growth on a constant-currency basis in the third 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 is undertaking efforts to boost the e-commerce channel.

However, Kraft Heinz is struggling with higher expenses. The company is incurring additional costs to keep its business operating amid the coronavirus crisis. Also, the impact of sluggish demand in foodservice channels worldwide amid COVID-19 as well as adverse currency fluctuation cannot be ignored. Apart from these, management in its last earnings call stated that during the third quarter it expects to see adverse impacts stemming from the divestiture of McCafe business.

What the Zacks Model Unveils

Our proven model predicts an earnings 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.

Kraft Heinz has a Zacks Rank #3 and an Earnings ESP of +0.80%.

Other Stocks With Favorable Combination

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

Church & Dwight CHD has an Earnings ESP of +1.80% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Hershey Company HSY currently has an Earnings ESP of +1.63% and a Zacks Rank #3.

Medifast MED currently has an Earnings ESP of +1.54% and a Zacks Rank of 3.

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Hershey Company The (HSY): Free Stock Analysis Report
 
Church Dwight Co., Inc. (CHD): Free Stock Analysis Report
 
MEDIFAST INC (MED): 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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