Kraft Heinz has blamed poor first-quarter performance, which saw sales fall 3.1% to $6.36 billion, on ‘lower consumption in North America’.
It’s the second successive quarter in which Kraft Heinz’s revenue has fallen year on year – down from $6.57 billion in the first quarter of 2016.
The company said that performance was affected by ‘lower consumption versus the prior-year period in North America’, but added that the decline was offset by significant gains from cost saving initiatives and benefits from the redemption of preferred stock in the prior year.
“Although our top line results in the first quarter reflect a slow start to the year, we remain on track with our key initiatives,” asserted Kraft Heinz CEO Bernardo Hees. “We are delivering product innovations, renovations and geographic expansion that positions Kraft Heinz to drive organic sales growth for the balance of 2017 and beyond. We also have good visibility on costs, savings and what we must do to deliver another year of profitable growth for The Kraft Heinz Company.”
Despite lower volumes, Kraft Heinz benefitted from price increases in ‘rest of world’ markets, primarily Latin America, which offset an unfavourable impact from the timing of promotional activity, including a later-than-usual Easter – particularly in Canada and Europe.
Net sales in the US were $3.5 billion – down 3.5% on the same period last year.
Volume/mix decreased 4.2% due to a combination of consumption weakness across categories, primarily driven by calendar shifts, as well as select distribution losses in the club channel. The categories most affected by these factors were foodservice, cheese, meats and nuts.
These declines were partially offset by continued growth from the Lunchables brand, and innovation-led growth in frozen meals and macaroni and cheese.
Net sales in Canada were $443 million – down 12.2% – while European sales were down 6.8% to $543 million.
© FoodBev Media Ltd 2020