Food companies have been struggling along with the grocery sector of late, and Kraft Heinz’s weak sales gain in the third quarter provided more evidence of the challenges.
The maker of Heinz ketchup, Oscar Mayer hot dogs and Kraft macaroni and cheese reported just a 0.7 percent increase in net sales during the three months ended Sept. 30.
Kraft Heinz, dually headquartered in Pittsburgh and Chicago, said net income attributable to common shareholders of $944 million in the quarter compared to $842 million in the same period a year earlier.
On a per share basis, earnings of 77 cents compared to 69 cents per share last year. Adjusted for one-time events, earnings of 83 cents per share beat analysts’ estimates by a penny.
Some of the gains were credited to lower integration and restructuring costs. Last week, the company told regulators that it had dissolved a committee set up to help with integration following the 2015 merger of the H.J. Heinz Co. and Kraft Foods, since that process had been completed.
Yet sales have yet to show dramatic shifts. The global food maker reported total sales of $6.31 billion, up 0.7 percent compared to a year ago.
“There’s no question that the retail environment, particularly in the United States, will remain both dynamic and challenging,” said CEO Bernardo Hees in the company’s quarterly earnings announcement released after the markets closed Wednesday.
He sounded an upbeat note going forward.
“However, the investments we’ve been making in our brands, our innovation pipeline, our people and our capabilities make us well-positioned to continue delivering sustainable, profitable growth in both the near and long term,” he said.
In its U.S. segment, net sales fell 0.4 percent to $4.4 billion. While other parts of the world saw gains, they don’t account for as much in sales.
Teresa F. Lindeman: tlindeman@post-gazette.com or 412-263-2018
First Published: November 1, 2017, 9:24 p.m.
