Kraft Heinz's green ketchup didn't last , but in a year when so many stocks are in the red, the packaged-food maker has proven resilient. Its second-quarter earnings will test that streak, as investors look for reassurances that shoppers aren't pulling back from their favorite brands.
Kraft (ticker: KHC), like so many food stocks , has held up better than the broader market, as investors see them as a safe haven—at least relative to the carnage elsewhere. The shares are up more than 6% year to date, a period that's seen the S&P 500 fall double digits.
Kraft's results, due out Wednesday morning, come at a time when the consumer is looking increasingly strained by inflation: Following on the news of Walmart's (WMT) guidance cut and worries that Americans are trading down to save money, Kraft will face questions about whether or not customers are staying loyal to its brands.
Some deceleration is already baked in. Consensus calls for Kraft to report earnings per share of 68 cents on revenue of $6.39 billion. That compares with EPS of 78 cents and revenue of $6.6 billion in the year-ago quarter.
The company delivered an upbeat quarter and raised its key organic sales outlook when it most recently reported in late April. Therefore investors will be keen to hear if the company stands by its outlook, and whether margins are holding up amid inflation and promotional pressures.
Other food companies have so far put up strong results , including PepsiCo (PEP) and Coca-Cola (KO), although the picture is more clouded elsewhere in staples .
Although it has been gaining some bulls , most analysts aren't particularly eager to recommend the shares: Just five of the 22 analysts tracked by FactSet rate Kraft at Buy or the equivalent, while nearly two-thirds remain sidelined. The average analyst price target is $42.97.