PITTSBURGH — Net sales and volume/mix both decreased in the first quarter ended March 30 for the Kraft Heinz Co. as headwinds came from reduced Supplemental Nutrition and Assistance Program (SNAP) benefits and softness in the company’s away-from-home business.

“You can see that like many companies we continue to navigate through short-term volatility,” Carlos Abrams-Rivera, chief executive officer, said in pre-recorded comments issued May 1. “A pressured consumer, persistent inflation, headwinds from SNAP, industry softness in away from home and rising supply chain risks are some of the common themes the industry is currently facing.”

Net income of $801 million, or 66¢ per share on the common stock, was down 4.2% from $836 million, or 68¢ per share, in the previous year’s first quarter. Sales decreased 1.2% to $6.41 billion from $6.49 billion while organic sales were down 0.5%. Pricing had a positive impact of 2.7 percentage points, but volume/mix had a negative impact of 3.2 percentage points.

“Organic net sales performance in Q1 was slightly better than Q4 of 2023, improving 20 basis points sequentially,” Abrams-Rivera said in the pre-recorded comments. “Our volumes also improved by approximately 120 basis points, from down 4.4 percentage points in the fourth quarter of 2023 to down 3.2 percentage points in the first quarter of 2024.”

In North America, sales dipped 1.2% to $4.83 billion from $4.89 billion. Pricing increased by 2.5 percentage points, but organic sales decreased 1.2% and volume/mix decreased 3.7 percentage points.

“We expect the headwinds related to the decline in SNAP benefits to begin to dissipate in the second quarter,” said Andre Maciel, global chief financial officer, in the pre-recorded comments.

Lapping the headwinds from SNAP in the second quarter should benefit Kraft Heinz’s macaroni and cheese business, Abrams-Rivera said in a May 1 earnings call.

“Mac and cheese was probably one of the categories that were more actually impacted by SNAP, and as we go into Q2, beginning now in May, you'll see a plethora of new innovations from gluten-free to new options and flavors on our mac and cheese  business as well as some new, exciting things for the category with some new SKUs that we're bringing in the second half of the year,” he said.

Kraft Heinz this year plans to launch five 360Crisp product launches, starting off with a Delimix Chipotle Chicken Quesadilla, Abrams-Rivera said in the pre-recorded comments.

In international developed markets, sales decreased 0.6% to $855 million from $860 million. In emerging markets, sales decreased 2.1% to $728 million form $744 million.

Globally, organic sales in the away-from-home business increased 0.1%, Abrama-Rivera said.

“These results were impacted by softening markets in the US, especially for restaurants, as well as two planned business exits that will result in a positive mix impact,” Abrams-Rivera said in the pre-recorded comments. “The declines in the US were offset by continued growth in the rest of the world, which grew high single digits.”

A gap between high-income consumers and low-income consumers is impacting the away-from-home business, Abrams-Rivera said in the earnings call.

“So, the lower-income consumers are challenged with interest rates remaining high, gas prices elevated and savings dwindling,” he said. “So, there's a clear pullback of restaurant spend by these lower-earning households, especially in restaurants and convenience stores. These consumers are looking for value as they prepare more meals at home.”

In the second quarter, Kraft Heinz expects performances in North American retail and emerging markets to improve, Maciel said in the pre-recorded comments.

“We expect global away from home to continue to be impacted by industry softness in the US and the planned business exits,” he said. “We also had to temporarily shut down one of our plants for unplanned maintenance. This factory produces many of the products for our North America away-from-home business.

“We have resumed operations, and we expect the impact associated with the shutdown to be approximately 50 to 100 basis points to total Kraft Heinz organic net sales growth and to be isolated to the second quarter.”