Kraft Heinz shares jumped 8% after booming sales outside of North America helped it record second quarter top-line growth.
Sales at the ketchup manufacturer beat analyst expectations, as they increased 0.7% to $6.6bn for the three months ended 30 June, on the back of strong condiment and sauce sales.
Despite top-line growth, sales in the US and Canada both slumped. Net sales in the US dropped 1.9% to $4.5bn in the quarter, while sales in Canada fell 4.5% to $564m.
But these were significantly offset by growth in its EMEA (Europe, Middle East and Africa) and rest of the world regions, which each provided much-needed growth.
Growing condiment and sauce sales in Europe, as well as positive strides in the food service market, pushed EMEA sales up 8.7% to $703m.
High price inflation of 9.2%, particularly due to currency fluctuations in Latin America, drove growth in the ‘rest of the world’ region, where sales grew 13.5% in $906m.
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The HP-sauce owner said condiments and sauces again performed well in the region, offesting the damage caused by truck strikes in Brazil, which hampered growth at rival Unilever.
The US giant expects profitability to get better through the year, commented Kraft Heinz CEO Bernardo Hees.
“Our results through the first half were stronger than the expectations we put forward as recently as three months ago, and we have been even more encouraged by our recent performance in the marketplace,” he said.
“We believe we are now in a position to drive sustainable top-line growth from a strong pipeline of new product, marketing and whitespace initiatives that are backed by investments in capabilities for brand and category advantage.
“And while cost inflation on many fronts has been holding back our bottom line, we expect our profitability to improve by year-end, with further momentum into 2019.”
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