Kraft Heinz (NASDAQ: KHC), the Warren Buffett-backed food company has reported for a second time this year, a new round of impairment charges and lower sales after it was forced to take a USD 15 Billion write-down earlier this year as shoppers avoided the brand.
Shares in Kraft Heinz, already down 28 % so far this year, dropped another 7.8% in pre-market trading on Thursday after first-half profits dropped by half. Net income attributable to the company’s shareholders fell to USD 854 Million, or 70 cents per share, in the six months ended June 29, from USD 1.76 Billion, or USD 1.43 per share, a year earlier as it recorded a USD 744 Million goodwill write-down. It comes after the Chicago-based company earlier this year revealed an annual loss, a one-third cut to its dividend and an SEC investigation into its accounting.
Kraft Heinz’s earnings report was delayed while it restated financial reports for a near three-year period after an internal investigation into lapses in procurement practices by some of its employees.
The group had promised to transform the food industry when it was created in 2015 by the combination of Kraft and Heinz, a deal engineered by the investment firm 3G Capital. However, its difficulties have come to symbolize the problems facing the world’s biggest consumer goods companies as they grapple with rapidly changing consumer tastes.