(Bloomberg) -- Kraft Heinz Co. fell on Thursday after reporting a decline in fourth-quarter sales, the latest sign that the maker of Maxwell House coffee and Grey Poupon mustard has a long road ahead.
The company reported sales of $6.54 billion in the period -- below the average estimate from analysts. Organic revenue, which strips out items like currency volatility, fell 2.2%, more than anticipated.
Chief Executive Officer Miguel Patricio, who has now been at the helm for 7 1/2 months, is under pressure to show improvement at a company that’s struggled to fend off upstart brands. He said progress is being made: “Our turnaround will take time, but we expect to make significant progress in 2020.”
Nonetheless, Kraft Heinz still expects to see a decline in Ebitda, a measure of earnings that excludes items like taxes and interest, over the course of 2020. The company will hold an investor meeting and release a more detailed strategic plan in early May.
Patricio has pledged more support for brands that have performed well, like Heinz ketchup and Philadelphia cream cheese. In the fourth quarter, peanut butter and pasta sauce consumption rose, while cheese and coffee -- two important Kraft Heinz products -- saw declines in shipments.
The company has said it will deploy its investment more efficiently, cutting the number of new projects by half in 2020, while spending more on marketing. Kraft Heinz said lower procurement and logistics prices for commodities “more than offset” higher costs elsewhere.
Kraft Heinz shares fell as much as 8.2%, the most since August. The stock’s 25% decline in 2019 was among the worst on the S&P 500 Index.
©2020 Bloomberg L.P.
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