Kraft Heinz is a company in crisis. It spent the first half of 2019 embroiled in an accounting scandal. Its CEO resigned. And its sales are in a massive slump as people search for healthier, less-processed foods.
The company finally reported its heavily delayed results for the first half of the year Thursday. The numbers did little to calm investors’ nerves.
Kraft Heinz said sales in the first half of 2019 fell nearly 5% from a year ago and profit was down more than half. Although earnings topped forecasts, revenue did not.
And the company disclosed that it was writing down the value of more of its poorly performing brands, including $474 million in charges tied to Velveeta, Maxwell House, Miracle Whip and three other brands. It also took a $744 million charge after lowering sales forecasts for several of its international businesses.
The stock plunged 15% in early trading to a new all-time low and it was the worst performer in the S&P 500. Shares of the company have lost nearly 40% this year.
“The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward,” Patricio said in a statement. “We have significant work ahead of us to set our strategic priorities and change the trajectory of our business.”
Kraft Heinz had delayed its financial reports because of an internal investigation of its accounting practices as a result of a probe by the Securities and Exchange Commission.