Kraft Stocks Drop After Company Posts Quarterly Loss

Kraft Heinz is under investigation by U.S. regulators. Analysts say this is part of the reason for a 20% loss in stock value on Thursday.

The company’s stock prices are at their lowest point since the H.J. Heinz Company purchased Kraft Foods Group in 2015. They are now the fifth-largest food and beverage company in the world as well as one of Warren Buffett’s largest investments. Some experts believe that the company’s struggles are due to a societal shift toward eating healthier foods.

Some of Kraft’s brands, such as Velveeta cheese, aren’t producing the level of ongoing growth that creates confidence with investors. Higher commodity costs and the rising popularity of boutique and specialty brands create an even more challenging landscape for the company.

Kraft was subpoenaed by the U.S. Securities and Exchange Commission in October 2018 as part of an ongoing investigation into their accounting practices. The company is also under an investigation conducted by the SEC about their internal controls related to procurement.

CFO David Knopf indicated that the company expects to “take a step backwards in 2019” due to the ongoing investigations, lack of investor confidence, and market conditions. The company forecasts adjusted earnings of between $6.3 billion and $6.5 billion during 2019.

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