The Kraft Heinz Company (NASDAQ: KHC) today reported preliminary financial results for the first half of 2019 that reflected lower net sales despite improving consumer takeaway trends in key markets, as well as the adverse impacts of ongoing cost inflation, greater investments, and higher depreciation and amortization expenses.
For the six months ended June 29, 2019, net sales were $12.4 billion, down 4.8% versus the year-ago period. Operating income registered $1.296 billion, compared to $2.85 billion in the prior-year half, a decrease of 54.6% Net income decreased to $854 million compared to $1.75 billion
United States net sales were $8.7 billion, down 1.9% versus the year-ago period. Pricing decreased 1.8 percentage points, driven by a 0.9-percentage-point unfavorable impact from promotional timing versus the prior year period, increased in-store activity behind Lunchables and certain frozen food categories, as well as price reductions to reflect lower key commodity costs in nuts, dairy and coffee.
"The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward," said Kraft Heinz CEO Miguel Patricio. "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."
Shares declined $4.72, or 15.3% to $26.15
