Pandemic-induced curbs that led individuals to eat at house and depend on packaged meals proved to be a boon for the Chicago-based firm, which has struggled with tepid gross sales and was pressured to put in writing down the worth of a number of manufacturers by billions of {dollars} over the previous two years.
However the surge in demand and stockpiling in some components of the world because of a resurgence in COVID-19 instances have fueled a bounce in costs of commodities similar to sugar, wheat and soy.
“Much like business friends, our value pressures have accelerated for the reason that begin of the yr,” Chief Govt Officer Miguel Patricio stated in ready remarks earlier than the earnings name.
The packaged meals maker forecast mid-single-digit inflation in 2021 with acceleration starting within the second quarter. Peer Mondelez on Tuesday warned of value hikes to fight larger uncooked materials prices.
“We proceed to suppose our cost-benefit equation is manageable”, Patricio stated, including that its forecast doesn’t embrace any pricing modifications.
Shares of Kraft, which tasks current-quarter natural internet gross sales to rise by a mid-single-digit share, rose 2.3% in morning commerce.
Gross sales within the Jell-O maker’s worldwide markets together with the UK, Australia and Latin America, which account for a fifth of its income, rose 7.2%.
Internet gross sales rose to $6.39 billion within the three months ended March 27, surpassing analysts’ common estimate of $6.24 billion, based on IBES Refinitiv.
Excluding gadgets, Kraft earned 72 cents per share, beating estimate of 59 cents.