The king of macaroni and cheese and ketchup reported sales and profits that exceeded expectations on Thursday. The company posted solid sales profits in its retail business in the United States, citing strong consumer demand due to the Covid-19 outbreak. Still, the actions of Kraft Heinz (KHC) It fell 6% in Thursday morning trading.
Kraft Heinz has been in exchange mode for the past few years. The company has been struggling to catch up with its rivals who have launched more innovative food products as consumers searched for healthier organic foods as well as alternatives to plant-based meat.
But Kraft Heinz bounced back in 2020 under the leadership of new CEO Miguel Patricio, who has been aggressively writing underperforming brands to focus more on core products that continue to perform well.
“Our response to the current COVID-19 pandemic reflects the hard work and dedication of our remarkable employees around the world,” Patricio said in a statement. “We are now beginning to realize the benefits of agility and scale.”
In that regard, Kraft Heinz announced that it would take almost $ 3 billion in charges in the second quarter to reflect the goodwill impairment charges of $ 1.8 billion for some of its reporting units and $ 1.1 billion. in charges due to the poor performance of Oscar Mayer, Maxwell House and Other brands.
Kraft Heinz shares are up nearly 5% this year. The solid earnings report is also good news for the company’s highest-profile sponsors: private equity firm 3G Capital and Warren Buffett’s Berkshire Hathaway (BRKB). Berkshire and 3G teamed up in 2013 to buy Heinz and merged it with Kraft two years later.
