Reuters — Kraft Heinz, North America’s third-largest food and beverage company, reported lower-than-expected quarterly profit and sales, hurt by weak demand in the U.S. and Canada.
Shares of the company, which owns brands such as Velveeta cheese and Heinz ketchup, were down nearly three per cent at $86.75 in after-hours trading on Wednesday (all figures US$).
U.S. sales, which account for about 70 per cent of Kraft’s total revenue, fell 3.5 per cent, mainly due to weak demand for its cheese, meats and nut products.
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Canada sales fell 12.2 per cent in the first quarter ended April 1.
A muted spending environment in the U.S. coupled with changing consumer tastes toward fresh, organic food over processed food has forced the packaged food maker to launch new products and revamp its ready-to-eat meals to remove synthetic colors and preservatives.
Kraft, in January, had partnered with Oprah Winfrey to launch a new healthy line of packaged food called Mealtime Stories.
The company’s net sales fell 3.1 per cent to $6.36 billion, missing analysts’ average estimate of $6.45 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to shareholders was $893 million, or 73 cents per share, in the first quarter, compared with $896 million, or 73 cents per share, in the year-earlier period.
Excluding certain items, Kraft earned 84 cents per share, missing analysts’ average estimate of 86 cents per share.
— Reporting for Reuters by Gayathree Ganesan in Bangalore.
