Kraft Heinz has announced its operating income in the first half of the year was half the size it was than the same period last year.
The owner of Philadelphia cream cheese and Maxwell House coffee also reported two impairment charges totalling $1.2 billion in its latest results. New CEO Miguel Patricio said: “The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward.”
The news comes six months after Kraft Heinz reported a loss of $12.61 billion in its fourth quarter and announced it received a subpoena from the US Securities and Exchange Commission (SEC) about its accounting and procurement policies. At the time, the firm also wrote down the value of assets including its Kraft and Oscar Mayer brands by $15 billion.
In the six months to the end of June, Kraft Heinz posted net sales of $12.4 billion, down 4.8% compared to the year-ago period. Operating income was $1.27 billion.
Patricio, a former Anheuser-Busch marketing executive who became CEO just last month following the departure of Bernardo Hees, added: “We have significant work ahead of us to set our strategic priorities and change the trajectory of our business. But in my short time with the company, I have developed a strong appreciation for the affinity consumers around the world continue to have for our brands, the talent and determination of our employees, as well as the commitment of our customers.”
Kraft Heinz CEO Miguel Patricio.
Kraft Heinz had delayed its financial reports because of the SEC investigation into its accounting practices.
In the US, which makes up more than two-thirds of the company’s revenue, sales were down in the first half by 1.9%.
Critics of the company’s performance have argued that it has been too slow in launching innovative new products and responding to increased consumer demands for plant-based foods.
In an earnings call with investors, Patricio said: “We need to become more consumer-obsessed so we can better predict their behaviour even before they know it. There are practices that need to change in the product development process, so we can be faster and more consumer-centric with our new products.”
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