Kraft Heinz Reports Weaker Sales as Cheese, Cold Cut Shipments Fall
February 13 2020 - 8:18AM
Dow Jones News
By Micah Maidenberg
Kraft Heinz Co. reported weaker shipments for meats and dairy
products in the fourth quarter, dragging the struggling food
company's sales lower.
Kraft Heinz on Thursday said U.S. sales volumes fell in the
quarter, weighed down by fewer shipments of everything from cheese
and cold cuts to bacon and coffee. That performance more than
offset better demand for its condiments and products from its food
service unit.
Volumes fell as the company raised prices, distributed less cold
cuts and frozen items to certain retailers and promotions a year
earlier weren't repeated, the company said.
Overall, sales dropped to $6.54 billion in the quarter from
$6.89 billion the year earlier. Excluding currency fluctuations,
acquisitions and asset sales, sales dropped 2.2% year over year and
were weaker than the $6.61 billion analysts expected.
The producer of Oscar Mayer meats, Planters peanuts and other
food products has struggled as consumers have sought to eat fresher
items and bought more store brands developed by retailers. Kraft
last year wrote down the value of a number of brands, including
Oscar Mayer and Miracle Whip..
Kraft Heinz said Thursday it lowered the value of Maxwell House
coffee trademark by $213 million. The company also recorded noncash
charges tied to international businesses, including one in Latin
America focused on exports.
Chief Executive Miguel Patricio has said he wants the company to
simplify operations and make fewer but bigger bets as it tries to
develop popular new products. He created a new executive job last
year focused on growth.
"Our turnaround will take time, but we expect to make
significant progress in 2020," Mr. Patricio said Thursday,
describing 2019 results as disappointing.
Shares slipped 1.1% in premarket trading.
The company reported a profit of $182 million, or 15 cents a
share, compared with a loss of $12.57 billion, or $10.30 a share,
the year earlier, when Kraft Heinz wrote down the value of its
Kraft and Oscar Mayer brands by $15.4 billion.
It also reported an adjusted profit of 72 cents a share, or 4
cents more than what analysts predicted for that metric.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
February 13, 2020 08:03 ET (13:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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