The Kraft Heinz Company (KHC) shares retreated on Thursday as the company reported mixed results for its fiscal second quarter, with sales missing expectations and the company’s chief executive saying there’s “significant work” that needs to be done.
Sales for the three months ended June 29 slowed to $6.41 billion from $6.69 billion previously, while the consensus on Capital IQ was for $6.59 billion. Adjusted earnings fell to $0.78 a share from $0.99 a year earlier, but that was ahead of the Street’s view for $0.75 a share.
In June, Kraft Heinz restated financials dating back to 2016 and said it completed a probe into its procurement practices and internal controls. The company said it was taking steps to improve policies and procedures and strengthen internal controls over its financial reporting.
Shares sank more than 13% in pre-market trading.
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“The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward,” Chief Executive Miguel Patricio said in a statement. “We have significant work ahead of us to set our strategic priorities and change the trajectory of our business.”
On Thursday, the firm said its downbeat first-half result, which saw sales fall 4.8%, came even as consumer takeaway trends improve in key markets but also reflect rising cost inflation, higher investments and growing expenses for depreciation and amortization.
The owner of brands like Jell-O, Kool-Aid and Oscar Meyer said US sales fell to $8.71 billion in the six months ended June 29, compared with $8.88 billion a year earlier. Sales in Canada slipped to $1.01 billion from $1.05 billion and the Europe, Middle East and Africa region fell to 10% to $1.25 billion. Sales in the rest of the world dropped 17% to $1.39 billion.