Kraft Foods has lowered its earnings outlook for 2011, despite expectation-beating first-quarter profits, due to the loss of a contract to manufacture Starbucks-branded products.

The US group said yesterday (5 May) that its net income in the three months to the end of March dropped to US$802m, or $0.45 cents per share, from $1.88bn, or $1.16 per share, in the previous year, when the sale of its frozen pizza business boosted earnings. Excluding exceptional items, net earnings totalled $0.52 per share, beating consensus expectations of $0.47 a share.

Go deeper with GlobalData

Go deeper with GlobalData

The gold standard of business intelligence.

Find out more

Discover B2B Marketing That Performs

Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.

Find out more

Net sales rose 11% to $12.6bn, the company revealed. Excluding the impact of acquisitions, sales were up 4.6%, Kraft added.

The maker of Cadbury’s chocolate and Philadelphia cream cheese said that it had taken a number of pricing actions in the first quarter to offset higher input costs. Pricing contributed 3.7% to the group’s sales gain while volume and mix improvements added 0.9%, Kraft revealed.

Commenting on the results, Kraft CEO Irene Rosenfeld said: “We continue to benefit from brand-building investments which allowed us to successfully deliver net pricing to offset commodities increases and drive top-tier growth.”

Looking to the full year, Kraft said that it expects revenue growth of “at least” 4%.

GlobalData Strategic Intelligence

US Tariffs are shifting - will you react or anticipate?

Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.

By GlobalData

The company added that it anticipates full-year profit, excluding items, to total at least $2.20 a share.

However, this excludes the negative impact of the company’s loss of a contract to supply Starbucks RTD coffee and other branded products to supermarkets.

In February, before the loss of this contract, Kraft had predicted EPS growth of 11-13%, up from the $2.02 per share earned in fiscal 2010. This forecast would have given Kraft targeted earnings of approximately $2.24-2.28 per share.

For the full earnings release from Kraft click here.

Just Food Excellence Awards - Nominations Closed

Nominations are now closed for the Just Food Excellence Awards. A big thanks to all the organisations that entered – your response has been outstanding, showcasing exceptional innovation, leadership, and impact.

Excellence in Action
Winning five categories in the 2025 Just Food Excellence Awards, Centric Software is setting the pace for digital transformation in food and FMCG. Explore how its integrated PLM and PXM suite delivers faster launches, smarter compliance and data-driven growth for complex, multi-channel product portfolios.

Discover the Impact