Kraft Heinz KHC is benefiting from solid growth endeavors, including robust product development, pricing efforts and enterprise transformation plans. Apart from these, the company is witnessing higher consumer demand, stemming from escalated at-home consumption and more cook-at-home amid the coronavirus pandemic.
Factors Working in Favor of Kraft Heinz
Kraft Heinz is focused on improving the performance of its key brands like Heinz, Kraft and Planters. Management earlier outlined that the company will make significant investments in marketing, go-to-market capabilities and product development. It is on track with identifying areas that hold significant growth opportunities and is undertaking product development efforts. Although Kraft Heinz has been adjusting various product innovations amid the coronavirus outbreak, it continues to remain an integral part of the company’s growth strategies. Moreover, management is undertaking efforts to boost the e-commerce channel. Such well-chalked out efforts have been aiding growth across several business categories.
In order to ramp up overall business, Kraft Heinz laid down certain enterprise transformation strategies. In this context, the company is on track to build efficiency across its supply chain, with particular emphasis on procurement, manufacturing and distribution. During third-quarter 2019, management implemented nine transformational projects to strengthen some of the core areas of the business. Among them, five projects are directed toward bolstering the top line, two for enhancing operational efficiencies and the remaining for increasing effectiveness.
Another important focus area of the company is its workforce. Management believes that strength in its people plays a key role in realizing its goals. As a result, the company has undertaken several moves to strengthen its leadership.
Further, it has been increasing visibility and control of its cost components, especially in areas such as marketing and e-commerce. It is also keeping a close watch on investments made for enhancing sales and customer services. Further, the company is in the process of identifying cost-curtailment opportunities across the supply chain. It is also seeking to induce efficiency across operations. Moreover, solid pricing initiatives have been aiding Kraft Heinz for a while now. In the first quarter of 2020, overall pricing was up 1.6%, driven by price improvements in the United States and International markets.
The aforementioned growth efforts are likely to help this Zacks Rank #2 (Buy) company to counter the challenges in its path and maintain a solid footing. Shares of the company have gained 15.9% in the past three months compared with the industry’s growth of 6.4%.
Other Top Picks
Conagra Brands CAG has a long-term earnings growth rate of 7% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here.
McCormick MKC currently has a long-term earnings growth rate of 5.8%and a Zacks Rank #2.
B&G Foods BGS, with a Zacks Rank #2, currently has an Earnings ESP of +1.56%.
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Conagra Brands Inc. (CAG) : Free Stock Analysis Report
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