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Kraft Heinz reports 2Q18 34% decrease in net income

Net sales were $6.7 billion, up 0.7 percent versus the year-ago period

The Kraft Heinz Company reported a 34 percent decrease in net income for the second quarter of the 2018 fiscal year, compared to the same period in 2017.

The Company reported a net income of $756 million in its latest quarter that ended July 31, down $403 million when compared to the second quarter of the 2017 fiscal year, primarily due to non-cash impairment charges in the current period, versus non-cash curtailment gains recognized in the prior year period related to the Integration Program.

“Our results through the first half were stronger than the expectations we put forward as recently as three months ago, and we have been even more encouraged by our recent performance in the marketplace,” said Kraft Heinz CEO Bernardo Hees.

“We believe we are now in a position to drive sustainable top-line growth from a strong pipeline of new product, marketing and whitespace initiatives that are backed by investments in capabilities for brand and category advantage. And while cost inflation on many fronts has been holding back our bottom line, we expect our profitability to improve by year-end, with further momentum into 2019,” said Hees.

Net sales were $6.7 billion, up 0.7 percent versus the year-ago period, including a favorable 0.3 percentage point impact from currency and a net 0.8 percentage point benefit from acquisitions and divestitures.

United States net sales were $4.5 billion, down 1.9 percent versus the year-ago period. Pricing increased 0.4 percentage points as higher pricing in select categories was partially offset by the timing of trade spend, as well as lower pricing to reflect declines in certain key commodity costs, particularly bacon. 

Canada net sales were $564 million, down 4.5 percent versus the year-ago period, reflecting a favorable 3.7 percentage point impact from currency and an 8.2 percent decline in organic net sales. 

EMEA net sales were $703 million, up 8.7 percent versus the year-ago period, including a 5.4 percentage point benefit from currency and a negative 0.7 percentage point impact from the divestiture of a joint venture in South Africa.

Rest of World net sales were $906 million, increasing 13.5 percent versus the year-ago period, including a negative 5.4 percentage point impact from currency and an 8.1 percentage point contribution from the Cerebos acquisition.

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