Kraft Heinz Co. (NASDAQ:KHC)

The financial data reveals a series of notable trends over the five-year period examined. Net sales remain constant as a baseline measure, set at 100% for all years.

Cost of Products Sold

This item shows variability, starting relatively high at -68.58% of net sales in 2015, dropping to its lowest level of -63.01% in 2017 before rising again to -67.38% by 2019. The decline in cost of sales in 2016 and 2017 contributed to improvements in profitability metrics during those years.

Gross Profit

Gross profit displayed a positive trend from 31.42% in 2015 to a peak of 36.99% in 2017, benefiting from lower cost of products sold. However, it declined thereafter to 32.62% by 2019, consistent with rising product costs.

Selling, General and Administrative Expenses (SG&A)

Excluding impairment losses, SG&A expenses significantly decreased from -17.02% in 2015 to -10.98% in 2017, indicating improved operational efficiency. Nevertheless, the total SG&A expenses sharply increased in 2018 to -72.87%, driven by substantial goodwill and intangible asset impairment losses, which were recorded at -26.68% and -33.99% respectively. These impairments persisted at lower levels in 2019, moderating total SG&A to -20.33%.

Operating Income (Loss)

Operating income demonstrated a strong upward trajectory from 14.39% in 2015 to 25.82% in 2017, reflecting improved profitability. However, 2018 experienced a severe downturn with an operating loss of -38.91%, primarily due to the heavy impairment charges. By 2019, operating income had partially recovered to 12.29%.

Interest Expense

Interest expenses declined substantially from -7.2% in 2015 to around -4.28% to -4.89% range between 2016 and 2018 but increased again to -5.45% in 2019, indicating some variability in financing costs.

Other Income (Expense)

Other income/expenses remained minimal and close to neutral through 2015 to 2017, with a slight positive swing in 2018 and a significant positive contribution of 3.81% in 2019, helping to temper losses and improve pre-tax income.

Income (Loss) Before Income Taxes

The pattern mirrors operating income, rising from 5.52% in 2015 to a high of 21.08% in 2017, followed by a sharp negative swing to -43.10% in 2018, and a recovery to positive territory at 10.65% in 2019.

Provision for Income Taxes

The tax provision fluctuated widely, moving from a small negative value to a significant positive benefit in 2017 (20.81%), then back to modest positive and negative values in following years. These swings impacted net earnings volatility.

Net Income (Loss)

Net income attributable to Kraft Heinz showed remarkable improvement up to 2017, peaking at 41.93%. However, a sharp reversal occurred in 2018 with a steep loss of -38.8%, mainly due to the impairment losses mentioned earlier. In 2019, net income rebounded to 7.75%, indicating partial recovery but not reaching the peak levels observed in 2017.

Preferred Dividends

Preferred dividends were significant in 2015 and sharply decreased afterward, disappearing from reported figures after 2016, suggesting changes in capital structure or dividend policy.

Net Income Attributable to Common Shareholders

This metric reflects overall net income trends but starts from a negative base in 2015 (-1.45%), sharply improving to a notable 41.93% in 2017 before the significant downturn in 2018 and subsequent partial recovery in 2019. This underlines volatility in shareholder returns over the period.