The Kraft Heinz Company Provides Business Update Relating to COVID-19 Outbreak
Strong company response to help feed consumers around the world
As communities around the world struggle to cope with the real-life implications of the coronavirus (COVID-19) outbreak, The Kraft Heinz Company is providing an update on its response to the pandemic, the rescheduling of its upcoming Investor Day and business impacts to date, ahead of its first quarter 2020 earnings call later this month.
“Right now, our mission as a company has never been clearer: we have a huge responsibility to keep feeding the world,” said CEO Miguel Patricio. “Each leader on our team is focused on making the company and our global business as flexible and agile as possible to meet demand forecasts that are changing daily – and sometimes, hour by hour. We are inspired by our employees on the front lines – in our manufacturing plants and distribution centers, which all remain operational, and our in-store sales teams – who are working tirelessly each day to meet the demand and make sure consumers have the food and nourishment they need during these uncertain times.”
As announced on March 20, Kraft Heinz is donating $12 million globally to ensure people across the world have the food they need during this challenging time. As part of this commitment, the company is making a donation valued at $6.6 million to Feeding America®, the largest domestic hunger relief organization in the United States, to help support food banks located near Kraft Heinz offices and plants. The Feeding America donation consists of $1.9 million in cash and $4.7 million in products like Kraft Macaroni & Cheese.
As the COVID-19 situation evolves, Kraft Heinz leadership will continue to evaluate and adapt as needed to ensure the health and safety of its employees and support for our consumers.
Business Impact and Q1 2020 Earnings
The company’s growth has accelerated in the wake of very strong consumer demand for its products and trusted brands, despite significant declines in Foodservice-related sales around the world. Net sales are now expected to increase approximately 3% and Organic Net Sales(1) are expected to increase approximately 6%. The difference between expected net sales and Organic Net Sales is primarily attributable to prior year divestitures and currency impacts. This compares to previous expectations for a low single-digit rate of decline in Organic Net Sales versus the prior year.
At the same time, the company does not expect the full benefit from incremental sales in the quarter to flow through to net income/(loss) from continuing operations, Adjusted EBITDA(1), or earnings per share due to added expenses to meet this accelerated growth in addition to headwinds previously disclosed on its February earnings call.
The company expects to release its first quarter 2020 financial results on Thursday, April 30, 2020, before the market opens. Kraft Heinz management will host a conference call at 8:30 a.m. Eastern Daylight Time that day to review and discuss its results, offer a brief preview of the topics that will be unveiled during our Investor Day and conduct a question-and-answer session with analysts.