KHC Kraft Heinz Company

By Annie Gasparro 

Kraft Heinz Co. said higher grocery demand during the coronavirus pandemic is setting the food maker up to exceed sales expectations for next year.

Kraft Heinz said Thursday that revenue rose 6.3% in its third quarter, excluding the effects of currency fluctuations and divestitures. Its earnings topped analyst expectations, sending shares up 3% in premarket trading.

Chief Executive Miguel Patricio has said that with people staying at home because of the coronavirus pandemic, the company has been able to attract younger consumers and draw shoppers of all ages to its familiar food brands.

"Although there are multiple future scenarios we must plan for and manage against, we are in a strong position," he said.

However, brands such as Oscar Mayer deli meats and Maxwell House coffee have lost market share. The company has said it would increase advertising in hopes of capitalizing on the sales momentum generated by the pandemic.

Mr. Patricio last month outlined for investors a plan to further cut costs and spend the savings largely on innovation and marketing for its most promising brands.

Kraft Heinz's namesake cheese wasn't among them. The company has agreed to sell a major chunk of its cheese business to French company Lactalis Group for $3.2 billion in a deal expected to close next year.

Overall for the quarter, Kraft Heinz's profit fell to $597 million from $899 million a year earlier, primarily due to divestitures. Excluding certain one-time charges, its adjusted profit rose 1.4% to 70 cents a share. Its revenue rose 6% from the prior year to $6.44 billion. The results topped analysts' projections of $6.32 billion in sales and 62 cents a share in adjusted earnings.

Write to Annie Gasparro at annie.gasparro@wsj.com

(END) Dow Jones Newswires

October 29, 2020 08:41 ET (12:41 GMT)

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