Kraft Heinz has reported better-than-expected profit growth for its fiscal second quarter, despite weak sales. The group also said it is reviewing all its product categories to improve quality, as it looks to attract consumers back.
For the quarter, the world’s fifth-largest food & drinks maker saw net profit grow to $950m, from $366m last year, while underlying earnings were up 39% to 85 cents. The results were helped by its cost-control strategy, which saw general and administrative expenses fall by 19% to $895m in the quarter.
Sales, however, were down 4.7% to $6.8bn, hurt in particular by a 1.9% decline in the key US market. The group was hurt by weaker demand for its Maxwell House and Smart Ones brands.
Kraft Heinz said it will now review its product quality, noting that consumers are increasingly shifting towards healthier and fresh foods. The group plans to develop new products to address those shifts in taste, with new dessert, cheese and frozen items set to be introduced in the second half of the year.
CEO Bernardo Hees noted: “Our biggest challenge remains the fact that we continue to have a number of categories where consumption trends are working against us. We have to fix some categories, we have to put more wood on the fire in some categories.”