Kraft Heinz Sales Hurt by Currency

Kraft Heinz Co., run by the Brazilian private-equity firm 3G Capital Partners LP, said Wednesday that sales fell 3.8%, mostly because of currency headwinds.

Net sales declined 11.7% in Europe and 15.6% in the rest of the world, on a pro forma basis, assuming Kraft had been acquired as of December 30, 2013. Net sales in the U.S. were nearly flat, inching up 0.2%.

Selling, general and administrative expenses dropped 12.8% to $865 million, on a pro forma basis, helping the company beat expectations for adjusted earnings and revenue.

"Our savings are coming in faster than anticipated, and we're performing better where it matters most, with our customers and consumers in the marketplace," Chief Executive Bernardo Hees said in prepared remarks.

Shares of the company, down 5.3% over the past 12 months, rose 5% to $84.01 in after-hours trading.

Food companies have been scrambling to keep pace with shifting consumer tastes as more people avoid processed food in favor of fresher ingredients.

"Consumption trends in a number of our core categories remain challenging, and we're entering a critical phase in our North American supply chain integration," Mr. Hees said.

For the quarter ended April 3, Kraft Heinz earned $896 million, or 73 cents a share, compared with $96 million, or 24 cents a share, a year before the merger. On a pro forma basis, per-share earnings rose to 73 cents from 46 cents.

Revenue fell 3.8% to $6.57 billion on a pro forma basis.

Analysts surveyed by Thomson Reuters expected earnings of 62 cents a share on revenue of $6.5 billion.

Kraft Heinz is run by 3G Capital, which bought Heinz in 2013 with the help of Warren Buffett's Berkshire Hathaway Inc.

The firm was a key architect of the merger between Kraft and Heinz and is known for pushing its company to cut costs using a method called zero-base budgeting, which calls for departments to justify their budget at the start of each new period.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

May 04, 2016 17:25 ET (21:25 GMT)

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