Dive Brief:
- Kraft Foods Group posted its fourth quarterly profit dip in a row Tuesday, falling 16% to $429 million, with weak demand for meals and desserts reportedly part of the problem. Last year's Q1 saw $513 million.
- However, the company beat Wall Street earnings per share predictions of 81 cents, reporting 86 cents. Revenue dropped only slightly, 0.2%, to $4.35 billion from $4.36 billion.
- Kraft and H.J. Heinz Company announced last month the two companies would merge.
Dive Insight:
The coming Kraft-Heinz merger — expected for a second half of 2015 completion — greatly benefited Kraft shares, which shot up 51% the past year.
"We've stepped up our focus on execution, our pricing actions over the past year are coming through, and we're benefiting from a disciplined approach to marketing," said CEO John T. Cahill in a news release. "There is clearly more work ahead of us, but we will continue to build on this momentum to delight our consumers and customers, and prepare us for the next chapter ahead."
Considering the company Kraft is merging with, it should likely be prepared for some severe cost cuts once the merger officially arrives. This strategy will likely have its benefits as Heinz has seen, and growing consumer concerns might offer "healthier" options to the combined company's lineup.
