{"id":7825,"date":"2019-02-22T19:56:35","date_gmt":"2019-02-22T19:56:35","guid":{"rendered":"http:\/\/www.styledeals.co.uk\/blog\/kraft-heinz-shares-fall-as-appetites-wane\/"},"modified":"2019-02-22T19:56:35","modified_gmt":"2019-02-22T19:56:35","slug":"kraft-heinz-shares-fall-as-appetites-wane","status":"publish","type":"post","link":"https:\/\/www.styledeals.co.uk\/blog\/kraft-heinz-shares-fall-as-appetites-wane\/","title":{"rendered":"Kraft Heinz shares fall as appetites wane"},"content":{"rendered":"\n
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\"AImage copyright<\/span>
\n Reuters<\/span><\/p>\n

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Image caption<\/span>
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\n Kraft Heinz is one of the world’s biggest food companies
\n <\/span>
\n <\/figcaption><\/figure>\n

Kraft Heinz’s share price has plunged to a record low amid signs that customer appetite for the company’s processed foods is weakening.<\/p>\n

The US food giant’s stock dropped 28% after it reported flat 2018 sales and said it would write down the value of its Kraft and Oscar Mayer brands by $15.4bn (\u00a311.8bn).<\/p>\n

The firm also said its accounting practices were under investigation.<\/p>\n

But said it did not expect that inquiry to be “material” to financial results.<\/p>\n

Kraft Heinz is one of the world’s biggest food companies, with brands that include its eponymous ketchup, Jello-O, Amoy and Wattie’s. <\/p>\n

Created in 2015 by the merger of Kraft Foods and HJ Heinz<\/a>, it is controlled by Berkshire Hathaway and the 3G Capital investment firm, which is known for its cost-cutting approach to its businesses.<\/p>\n

At Kraft Heinz, that strategy has delivered mixed results.<\/p>\n

The firm reported a $10.2bn loss for 2018, driven by flat sales of $26.2bn and the write-down on the brands. <\/p>\n

‘Overly optimistic’<\/h2>\n

Kraft Heinz blamed the 2018 shortfall on higher manufacturing and logistics costs. <\/p>\n

“We were overly optimistic on delivering savings that did not materialize by year-end.” Kraft-Heinz chief executive Bernardo Hees said.<\/p>\n

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Image copyright<\/span>
\n Heinz<\/span><\/p>\n

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Image caption<\/span>
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\n Brands at the time of the 2015 merger
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\n <\/figcaption><\/figure>\n

Kraft Heinz said the write down reflected expectations of lower profits going forward. <\/p>\n

Results were also affected by the decision to cut prices in the US in an effort to boost shopper demand.<\/p>\n

Mr Hees said he was encouraged by revived appetite for brands such as Philadelphia creamed cheese. The firm also plans to increase prices this spring.<\/p>\n

But executives warned that profit growth would not return until 2020, as the firm’s results are hit by a weaker first quarter, currency fluctuations and sales of parts of its businesses.<\/p>\n

Increased competition<\/h2>\n

Kraft Heinz, like others in the industry, is facing increased competition from less expensive, retailer brands, as well as growing consumer preference for non-processed food.<\/p>\n

“Our industry has been and is likely to remain challenged,” Mr Hees said.<\/p>\n

The firm’s shares, which have been sliding for about two years, fell below $35 Friday.<\/p>\n

The struggles also affected shares in rival food makers including General Mills, Conagra Brands, Unilever and Nestle SA.<\/p>\n

Kraft Heinz also recorded $25m in extra costs in the fourth quarter following an internal review triggered by an inquiry by the US Securities and Exchange Commission into accounting practices within its procurement division.<\/p>\n

“The company continues to cooperate fully with the US Securities and Exchange Commission,” it said.<\/p>\n

“At this time, the company does not expect the matters subject to the investigation to be material to its current period or any prior period financial statements.”<\/p>\n<\/p><\/div>\n


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Source<\/a> by [author_name]<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Image copyright Reuters Image caption Kraft Heinz is one of the world’s biggest food companies Kraft Heinz’s share price has plunged to a record low amid signs that customer appetite for the company’s processed foods is weakening. The US food giant’s stock dropped 28% after it reported flat 2018 sales and said it would write … <\/p>\n","protected":false},"author":0,"featured_media":7826,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-7825","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts\/7825","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=7825"}],"version-history":[{"count":0,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts\/7825\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/media\/7826"}],"wp:attachment":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=7825"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=7825"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=7825"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}