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The Kraft Heinz Co KHC

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Morningstar’s Analysis

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Even Though Kraft Heinz Loses Its Taste for Nuts After a Stout Q4, Shares Still Worth Snacking On

Erin Lash, CFA Sector Director

Analyst Note

| Erin Lash, CFA |

No-moat Kraft Heinz closed the books on a volatile 2020 in epic fashion, posting 6% organic sales growth in the fourth quarter and 240 basis points of adjusted operating margin expansion to 22.4%. While we concede that pandemic-induced stock-ups of essential fare (like that in Kraft Heinz’s mix) have provided a timely boost, we also attribute a portion of this improvement to the new course laid out by CEO Miguel Patricio centered on pursuing sustainable efficiencies and leveraging its scale while also elevating its brand spending and enhancing its capabilities.

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Company Profile

Business Description

In July 2015, Kraft merged with Heinz to create the third- largest food and beverage manufacturer in North America behind PepsiCo and Nestle and the fifth- largest player in the world. Beyond its namesake brands, the combined firm's portfolio includes Oscar Mayer, Planters, Ore-Ida, and Philadelphia. Outside North America, the firm's global reach includes a distribution network in Europe and emerging markets that drive around one fifth of its consolidated sales base, as its products are sold in more than 190 countries and territories around the world.

Contact
One PPG Place
Pittsburgh, PA, 15222
T +1 412 456-5700
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 28, 2020
Stock Type Slow Growth
Employees 38,000

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