Kraft Heinz raised prices more than expected to beat estimates

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Kraft Heinz Co. used price increases to help offset volume declines as the company continues a strategic review of its brands.

The company beat Wall Street sales estimates, with organic revenue in the second quarter declining 2%, the owner of Heinz, Kraft and Oscar Mayer brands said in a statement. Analysts had expected a drop of 2.8%.

That performance was aided by pricing rising 0.7 percentage points, with gains coming primarily in coffee. Analysts had expected a gain of just 0.09 percentage points. The company attributed the drop in volume to declines in cold cuts, coffee, Lunchables and frozen snacks.

Shares of Kraft Heinz were little changed in premarket trading. The stock had declined 7% this year through Tuesday’s close, compared to an 8.3% gain for the S&P 500.

The company also beat on profit last quarter and reiterated its annual outlook.

The packaged foods giant is on the brink of change, as it prepares to spin off a large part of its grocery business into a new entity, people familiar with the matter said earlier this month. Kraft Heinz, formed about a decade ago through a big merger, hasn’t said which brands it might unload, but has made clear it’s prioritizing its sauces and convenient meals, which it sees as having more growth potential.

The company said Wednesday that it’s “actively progressing with its evaluation,” and doesn’t have a set timeline for the process. It said the process might not end with any transaction.

Kraft Heinz is facing multiple headwinds, including consumers constrained by high inflation and competition from private-label brands. Americans are also moving away from more processed foods and toward healthier options.