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Food company Kraft Heinz (KHC) -5% despite Q2 beats
Kraft Heinz (KHC) believes that it is on track to emerge “much stronger” from the pandemic after posting quarterly beats on Wednesday, but its shares fell 5% in trading.
Food company Kraft Heinz (KHC) slipped 5% in Wednesday’s trading in the US despite easing past the Wall Street consensus in Q2.
CEO Miguel Patricio said that the food company is set to emerge “much stronger” from the pandemic and believes that the latest quarterly results are a clear sign that it will thrive during 2021.
The raw numbers were better than expected as adjusted earnings of $0.78 beat forecasts by six cents, while revenue came in at $6.615bn versus the $6.551bn expectations.
Investors may have been underwhelmed by the lack of growth in sales though as the figure was down from the $6.648bn recorded in Q2 during the height of the pandemic a year ago.
Kraft Heinz is confident about Q3, however, and sees organic net sales rising by a single-digit percentage.
The Chicago-based company noted that 2019 is a more apt comparison point considering the “exceptional” changes in consumer demand last year.
Sales of packaged goods skyrocketed amid stay-at-home orders globally, though senior executive Carlos Abrams-Rivera told Reuters that some trends prevalent in 2020 are holding firm.
He said: “We are seeing signs that several pandemic-inspired cooking and eating behaviors are sticking, even as mobility increases and restrictions lift.”
A $2bn cost-cutting drive is now underway at Kraft Heinz, a move that it hopes will free up more funds for marketing.
Kraft Heinz also announced in February that the sale of Hormel Foods (HRL) would “sharpen” its focus on driving growth and gaining a competitive edge in key markets.
KHC shares traded down in midweek though, with the 5.34% decline by mid-afternoon on the Nasdaq setting a new $36.86 price.
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