Kraft Heinz (KHC) reports Q3: everything you need to know ahead of earnings

What happened

Kraft Heinz will report earnings Wednesday before market open. Last quarter revenue was $6.26 billion, down 1.4% year on year, missing organic revenue and gross margin estimates. Analysts expect this quarter's revenue to decline 2.5% year on year.

Confirmed

Global impact / market context

Falling revenue and missed profit-per-sale estimates suggest Kraft Heinz is selling less or earning less on each sale. Because analysts have kept their estimates unchanged, any further weakness in sales or profit per sale could push the stock down when results arrive.

Analyst inference

Conagra reported revenue down 1.4% year on year, meeting estimates, while Hershey reported revenue up 3%. This gives a hint at shelf-stable food demand, which matters because weak peer sales could signal similar pressure on Kraft Heinz revenue.

Analyst inference

What to watch

1. Watch whether revenue meets the expected 2.5% year-on-year decline, since Kraft Heinz has missed Wall Street's revenue estimates multiple times over the last two years. Confirmed
2. Watch whether management explains how it plans to restore organic revenue growth, a measure of sales from existing products, after last quarter's significant miss. Proposed
3. Watch gross margin, which is profit left after product costs, because last quarter's miss suggests cost pressure or discounting that could keep profit per sale under pressure. Analyst inference

Evidence

• stockstory.org