Kraft Heinz (NASDAQ:KHC) shares are lower today after the food and beverage provider’s fourth-quarter revenue declined by 7.1% year-over-year to $6.9 billion. The figure lagged expectations by $80 million. On the other hand, EPS of $0.78 came in ahead of estimates by a thin margin of $0.01.
KHC’s organic net sales declined by 0.7%. Still, the company’s gross margin expanded by 180 basis points to 33.8%. During the quarter, net sales in the North America vertical contracted by 9.1% to $5.17 billion. Similarly, net sales in the International segment decreased by 0.2% to $1.69 billion. The company’s net income, however, saw a steeper decline of 15% to $757 million. That’s due to non-cash charges associated with its $162 million settlement of a defined benefit pension plan in the UK.
For Fiscal Year 2024, Kraft Heinz expects organic net sales growth in the range of 0-2%. The company projects its adjusted gross margin to expand modestly by 25 to 75 basis points. Adjusted EPS for the year is seen landing between $3.01 and $3.07. Separately, Kraft Heinz declared a quarterly dividend of $0.40 per share. The KHC dividend is payable on March 29 to investors of record on March 8.
What Is the Target Price for KHC Stock?
Overall, the Street has a Moderate Buy consensus rating on Kraft Heinz, and the average KHC price target of $39.43 implies a modest 9.1% potential upside in the stock. That’s after a nearly 8.8% rise in the company’s share price over the past three months.
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