Kraft Heinz Reports Weaker Sales as Cheese, Cold Cut Shipments Fall

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 a 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 fell 7.4% in morning trading Thursday.

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 [e-mail]

(END) Dow Jones Newswires

February 13, 2020 10:08 ET (15:08 GMT)

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