Kraft Heinz Co. (NASDAQ:KHC)

Gross Profit Margin

The gross profit margin demonstrated a generally positive trend from 2015 to 2017, increasing from 31.42% to a peak of 36.99%. However, this upward trajectory reversed in the subsequent years, declining to 33.96% in 2018 and further to 32.62% in 2019. This indicates an initial improvement in core profitability, followed by a gradual erosion in efficiency of production or cost control.

Operating Profit Margin

The operating profit margin exhibited significant volatility over the five-year period. After a strong increase from 14.39% in 2015 to 25.82% in 2017, it sharply declined to a substantial loss of -38.91% in 2018. Although there was a partial recovery to 12.29% in 2019, the margin remained considerably lower than in earlier years, suggesting operational challenges or extraordinary costs incurred in 2018 that negatively impacted earnings before interest and tax.

Net Profit Margin

Net profit margin mirrored the operational margin's fluctuations, rising from a modest 3.46% in 2015 to a high of 41.93% in 2017. This performance sharply deteriorated in 2018 with a negative margin of -38.8%, indicative of a significant net loss. A subsequent recovery to 7.75% in 2019 shows improvement but still reflects instability in bottom-line profitability during the period analyzed.

Return on Equity (ROE)

Return on equity improved steadily from 1.1% in 2015 to a peak of 16.66% in 2017, signaling effective use of shareholders' investments to generate earnings. This measure turned negative in 2018 (-19.73%), highlighting a period of poor financial performance and loss generation. The recovery to 3.75% in 2019 points to a partial regain of profitability but remains below earlier peak levels.

Return on Assets (ROA)

The return on assets followed a similar pattern, increasing from 0.52% in 2015 to 9.15% in 2017 before declining sharply to -9.85% in 2018. This indicates that asset utilization efficiency significantly dropped during 2018, corresponding with the overall loss situation. In 2019, ROA improved moderately to 1.91%, suggesting some level of restored asset productivity, though it remains subdued compared to prior years.

Gross Profit

Gross profit experienced a substantial increase from 2015 to 2016, rising from 5,761 million USD to 9,586 million USD. After that, it remained relatively stable in 2017 at 9,703 million USD before gradually declining in the subsequent years to 8,921 million USD in 2018 and further to 8,147 million USD in 2019.

Net Sales

Net sales showed a similar pattern to gross profit with significant growth from 18,338 million USD in 2015 to 26,487 million USD in 2016. Sales peaked in 2016 and then fluctuated marginally, falling slightly to 26,232 million USD in 2017, remaining virtually flat at 26,268 million USD in 2018, and decreasing to 24,977 million USD in 2019.

Gross Profit Margin

The gross profit margin improved noticeably from 31.42% in 2015 to a peak of 36.99% in 2017. However, this margin declined thereafter, dropping to 33.96% in 2018 and further to 32.62% in 2019. This indicates a reduction in profitability per dollar of sales in the later years despite stable net sales.

Summary of Trends

The company witnessed significant growth in both net sales and gross profit between 2015 and 2016, which contributed to improved profitability ratios. However, after reaching a peak in 2017, the gross profit and margins started to decline, reflecting potential pressures on cost management or pricing power. Despite overall stable sales figures from 2016 through 2018, the downward trend in gross profit margin by 2019 signals challenges in maintaining earlier profitability levels.

Operating Income (Loss)

The operating income exhibited significant fluctuations throughout the observed periods. It rose notably from 2,639 million USD in 2015 to a peak of 6,773 million USD in 2017, indicating substantial operational profitability improvement. However, in 2018, there was a sharp reversal, with operating income turning into a loss of 10,220 million USD. The following year, 2019, showed a recovery to a positive operating income of 3,070 million USD, though it remained below the earlier peak levels.

Net Sales

Net sales increased significantly from 18,338 million USD in 2015 to 26,487 million USD in 2016, with a relatively stable level around 26,000 million USD for the subsequent years through 2018. In 2019, there was a decline to 24,977 million USD, reflecting a reduction in sales volume or revenue compared to the previous three years.

Operating Profit Margin

The operating profit margin followed a trend similar to operating income. It improved consistently from 14.39% in 2015 to 25.82% in 2017, demonstrating enhanced operational efficiency and profitability. In 2018, the margin sharply declined to a negative 38.91%, highlighting significant operational challenges causing losses. The margin partially recovered to 12.29% in 2019, though it did not return to the earlier higher profitability levels.

Net Income (Loss) Attributable to Kraft Heinz

The net income showed significant fluctuations across the five-year period. There was a notable increase from 634 million US dollars in 2015 to 3,632 million in 2016, followed by a substantial rise to 10,999 million in 2017. However, this positive trend was interrupted in 2018 by a considerable loss of 10,192 million, indicating a sharp downturn in profitability. In 2019, the company returned to profitability with a net income of 1,935 million, though this figure remained well below the peak recorded in 2017.

Net Sales

Net sales demonstrated moderate variability over the years. Starting at 18,338 million US dollars in 2015, sales increased significantly to 26,487 million in 2016. However, sales figures stabilized thereafter, showing slight declines with values of 26,232 million in 2017, 26,268 million in 2018, and a more pronounced decrease to 24,977 million in 2019. This indicates a plateau in sales volume followed by a modest reduction at the end of the period.

Net Profit Margin

The net profit margin mirrored the volatility observed in net income. From a modest 3.46% in 2015, the margin surged to 13.71% in 2016 and experienced an extraordinary peak at 41.93% in 2017. The margin then collapsed to a negative 38.8% in 2018, reflecting the significant loss that year. In 2019, the margin improved to 7.75%, signaling a recovery though still significantly lower than the peaks observed in prior years.

Net Income (Loss) Attributable to Kraft Heinz

The net income experienced considerable volatility over the observed period. Starting at 634 million US dollars in 2015, there was a significant increase to 3,632 million in 2016, followed by a dramatic peak at 10,999 million in 2017. Subsequently, the company encountered a substantial loss of 10,192 million in 2018, before returning to a positive net income of 1,935 million in 2019. This pattern indicates a highly unstable profitability trajectory with a noteworthy downturn in 2018.

Shareholders’ Equity

Shareholders’ equity fluctuated notably throughout the periods. It commenced at 57,685 million US dollars in 2015, remained relatively stable in 2016 at 57,358 million, and then increased to 66,034 million in 2017. However, a sharp decline occurred in 2018 to 51,657 million, followed by a slight decrease in 2019 to 51,623 million. The drop after 2017 suggests either asset write-downs, dividend payments exceeding profits, or other factors negatively impacting the equity base.

Return on Equity (ROE)

The return on equity shows a trend correlating with the net income and equity changes. Starting from a low 1.1% in 2015, ROE rose markedly to 6.33% in 2016 and peaked at 16.66% in 2017, reflecting strong profitability relative to equity. In 2018, ROE plummeted to -19.73%, aligning with the large net loss and decreased equity. It partially recovered to 3.75% in 2019, demonstrating a slight improvement in generating returns on shareholders’ equity despite ongoing challenges.

The financial data reveals significant fluctuations in profitability and asset base over the five-year period.

Net Income (Loss) Attributable to Kraft Heinz (US$ in millions)

Net income exhibited a notable increase from 634 million in 2015 to a peak of 10,999 million in 2017, indicating strong profitability growth over those years. However, this positive trend reversed sharply in 2018, with the company reporting a substantial net loss of -10,192 million. In 2019, profitability recovered partially, returning to a positive net income of 1,935 million.

Total Assets (US$ in millions)

Total assets showed a gradual decline throughout the period. Starting at 122,973 million in 2015, assets decreased slightly to 120,480 million in 2016 and remained relatively stable in 2017 at 120,232 million. In 2018 and 2019, total assets declined more noticeably to 103,461 million and 101,450 million, respectively, reflecting a reduction in the asset base over time.

Return on Assets (ROA, %)

The ROA mirrored the pattern in net income, with a low but positive rate of 0.52% in 2015, increasing sharply to 3.01% in 2016 and peaking at 9.15% in 2017. The ratio turned negative in 2018, reaching -9.85%, consistent with the net loss reported that year. In 2019, ROA rebounded to 1.91%, signaling a partial recovery in asset profitability.

Overall, the company experienced strong earnings growth up to 2017, followed by a significant downturn in 2018 associated with asset impairment or other charges, which severely impacted profitability and returns. The following year showed some financial stabilization, though neither net income nor ROA returned to the previous peak levels. The gradual decrease in total assets may reflect divestitures or write-downs during this turbulent period.