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The Kraft Heinz Co. was the author of some legendary cost cuts last year. The American food company ordered the reimbursement of preferred stock which triggered benefits and discounts. As a consequence, the net income received a 50% boost which was redirected to shareholders. Nonetheless, the company is still registering weak sales for the second quarter as well.
The Discrepancy Between Net Income and Net Sales Points at Positive Effects of the Legendary Cost Cuts
Heinz accepted a merger with Kraft Foods Group two years ago which resulted in the world’s fifth largest food and beverage organization. The dual headquarters are located in Chicago and Pittsburgh. On Thursday, officials released the results of the second financial quarter after market closing.
The papers show a net income within three months that reached a spectacular amount of $1.16 billion which means 94 cents per share. By comparison, a year ago the numbers displayed $770 million net income which translated into 63 cents per share.
On the other hand, net sales decreased by 1.7% to $6.7 billion. However, this marked a clear improvement since the first quarter was pointing at a slip of 3.1%. The gap between income boost and sales regression shows that the company’s legendary cost cuts paid off in the end.
The processed food industry took a deep hit when consumers embraced the fitness trend. They are encouraged to consume natural foods and stay away from traditional, heavy dishes. This healthcare wave forced the company to act on it. Some of them decided to find another niche in their market while others turned to new leadership for guidance.
CEO Bernadero Hees Is Looking at a Hiking Performance for the Rest of the Year
Kraft Heinz CEO, Bernadero Hees, looked content with the results. He stated that from this point on the company would continue to grow for the rest of the year as well. Hees admitted that the plan from the beginning was to apply cost savings and redirect the funds towards investments in brands and people.
“As expected, our second quarter results were sequentially better than our first quarter.”
At the same time, Kraft Heinz claimed that it is going to increase shareholders’ dividends by 4% to $2.5 annually. In the past, the company used to cover $2.4 for them.
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