Kraft Heinz shares slide over Q3 profit drop | Progresiv

Kraft Heinz has reported weaker-than-expected results for its fiscal third quarter, hurt by higher costs and weak sales growth, sending its shares sliding in after-hours trading.

For the three months to 29 September, net sales were up 1.6% to 6.4 billion dollars (+2.6% organic basis), but operating profit fell by 30.4% to 1.1 billion dollars even as net profit was down 33.3% to 630 million dollars. Following the announcement, shares in the company fell by nearly 8% last evening.

Kraft said it was hurt by increased transport costs and investment in logistics, while pricing also declined, due to increased promotional support – all of which hurt its profit figures.  Meanwhile, sales growth remained sluggish in the key US market (+1.8%), even as it declined by 5.6% in Canada and by 3.3% in the EMEA region, with the one positive note being the Rest of World region (+9.9%).

Despite the weak showing, CEO Bernardo Hees insisted: “We believe that our Q3 results are strong evidence that our commercial investments are working, with solid top line performance in the quarter … While a number of one-off factors – as well as our desire to insure customer service – held back profit in the quarter, we remain confident that we are well-positioned to deliver sustainable, profitable growth going forward.” (www.kamcity.com)