While inflation may deter purchases of other items, The Kraft Heinz Co. reported third-quarter earnings demonstrating higher prices aren’t keeping most consumers from buying groceries.
The food products giant offers a variety of goods including Maxwell House coffee made in Jacksonville. But while company officials highlighted several iconic Kraft Heinz brands in its quarterly report, they didn’t discuss coffee at all.
Kraft Heinz said sales volume fell slightly in the quarter. However, because of big price increases, total sales excluding divestitures and acquisitions and foreign exchange fluctuations rose 11.6% to $6.5 billion.
“We see solid, ongoing demand for our brands – powerful brands that resonate with the consumer,” CEO Miguel Patricio said in a conference call with analysts, according to a company transcript.
“So what is at the heart of this success? Our iconic brands such as Heinz, Kraft Mac and Cheese, Philadelphia Cream Cheese, and Lunchables,” he said.
Maxwell House would have been considered one of those brands in years past. However, reports surfaced in early 2019 that Kraft Heinz was trying to divest the brand. Later reports by major financial news outlets said Kraft Heinz couldn’t get a price it wanted for Maxwell House so it decided to keep it, at least for the time being.
The nearly century-old Jacksonville facility at 735 E. Bay St., which employs about 200 people, is Maxwell House’s last remaining U.S. coffee plant.
Company officials have said little about Maxwell House over the last three years amid the speculation about a sale.
While Maxwell House did not come up in its presentation to analysts, the company’s quarterly report filed with the Securities and Exchange Commission did mention a $24 million impairment charge related to the brand taken in 2021.
“The impairment of the Maxwell House brand was primarily due to downward revised revenue expectations for mainstream coffee in the U.S.,” the report said.
Kraft Heinz has other coffee brands, including Gevalia, and the quarterly filing said total coffee sales rose 4.9% in the first nine months of 2022 to $644 million.
St. Joe profits from hospitality and leasing revenue
The St. Joe Co. reported third-quarter revenue rose 7% to $57.6 million, as hospitality and leasing revenue increases offset a decline in sales of homesites.
The Panama City Beach-based real estate developer said supply chain disruptions are delaying sales of residential properties.
“Delayed deliveries are a matter of change in timing of the sale and are not resulting in canceled contracts. Homebuilders continue to purchase our homesites as soon as we complete development, without any requests for extensions,” CEO Jorge Gonzalez said in an Oct. 26 news release.
St. Joe said it had a backlog of 2,376 residential homesites under contract as of Sept. 30 that are expected to generate about $186 million in eventual sales.
St. Joe’s earnings in the quarter fell 18% to $12.4 million because its 2021 results included a $3.6 million recovery payment for timber losses from Hurricane Michael in 2018.
St. Joe was a diversified conglomerate headquartered in Jacksonville that sold off its other businesses, beginning in the 1990s, to focus on real estate development. It moved its headquarters to the Florida Panhandle in 2010, where most of its properties are located.
Ameris reports higher earnings
Another company that moved its executive offices out of Jacksonville, Ameris Bancorp, reported third-quarter earnings that were higher than last year but slightly below most analysts’ forecast.
Ameris reported adjusted earnings of $1.32 a share, 12 cents higher than last year but 2 cents below the average forecast of analysts, according to Zacks Investment Research.
CEO Palmer Proctor said in an Oct. 27 news release the company had “significant expansion in our margin to 3.97%, continued improvement in our efficiency ratio to just over 50%, strengthening in our balance sheet and earning asset mix and tangible book value growth of more than 10%, annualized.”
Raymond James analyst David Feaster downgraded the stock from “outperform” to “market perform” Oct. 31 after the earnings report, but he said in a research note the results were better than he expected and “core trends generally remain favorable.”
Feaster downgraded Ameris because “the stock price has finally caught up with the strong fundamental performance of the bank, with Ameris shares significantly outperforming both the S&P and peers since mid-July.”
The stock has risen from near $40 in mid-July to a nine-month high of $53.37 on Oct. 27 after the earnings report.
“This outperformance is warranted in our view, as management positioned the bank to perform extremely well in this rising rate environment,” Feaster said.
Ameris moved its executive offices to Jacksonville after acquiring The Jacksonville Bank in 2016, although its official headquarters remained in Moultrie, Georgia.
It moved its executives, and its official headquarters, to Atlanta after another merger in 2019.