Kraft Heinz saw its fourth-quarter net sales decrease 5.1% as it disclosed impairment charges of $666 million, including writing down the value of Maxwell House by $213 million.
The Oscar Mayer and Philadelphia cream cheese owner was hit by lower demand in the US for cheese, coffee, cold cuts and bacon.
In the three months to December 28, net sales were $6.54 billion while net income stood at $182 million.
Last year, Kraft Heinz wrote down the value of assets including its Kraft and Oscar Mayer brands by $15 billion. The company posted a net loss of $12.61 billion in the fourth quarter of 2018.
The latest impairment charges included $213 million to lower the carrying amount of the Maxwell House trademark and a $453 million hit on assets in Australia, New Zealand and a Latin America exports business.
The company has also moved back the unveiling of its turnaround plan from March to May.
“I know many of you were expecting a March date versus a May date for the unveiling of our strategy,” said CEO Miguel Patricio in an earnings call with investors.
“But with Carlos Abrams-Rivera coming in as our new head of the US zone, I wanted to make sure we have his full input as we detail our multiyear plans for the bottom up before we present it to you.”
Former Anheuser-Busch executive Patricio took over as chief executive in July following the departure of Bernardo Hees.
For 2019, Kraft Heinz recorded net sales of $24.98 billion, down 4.9%, with net income of $1.93 billion.
“While our 2019 results were disappointing, we closed the year with performance consistent with our expectations, and driven by factors we anticipated,” said Patricio.
“We have taken critical actions over the past six months to re-establish visibility and control over the business. And we remain convinced Kraft Heinz has the potential to achieve best-in-class financial performance as we begin transforming our capabilities and making necessary investments in our brands based on deep consumer insights.
“Our turnaround will take time, but we expect to make significant progress in 2020, laying a strong foundation for future growth.”
© FoodBev Media Ltd 2020