Kraft Heinz posts savory Q2 sales

(FinacialPress) — Q2 financials for Kraft Heinz (KHC) have been made public, and the company posted tasty numbers. Results handily beat estimates set by Wall Street analysts. Even so, investors are left wondering if the company will drop a big part of its liquidity soon with a major acquisition.

The results propped up company stock by a full 9%. However, just like other companies in its sector, shares have experienced a downward trend over 2018. Thus far into the year, and even accounting for the pop in value caused by the positive results, its shares still have lost 20% of their 2017 value.

Kraft Heinz and its competitors have had to deal with increasing competition pressure from consumer good giants such as Costco(COST), Kroge (KR), Amazon (AMZN) and Walmart (WMT) – and their lower price offerings.

Added to that, commodities used as raw materials for its products and packaging are on the rise. Namely, agricultural products, pulp and aluminum.

Transportation has also become an issue. A trucker strike in Brazil, labor shortages in the US and rising oil prices have raised shipping rates considerably.

All of these factors have fueled rumors of consolidation within the food industry; the main target of these being Campbell Soup (CPB

These rumors were first reported by the NY Post in late June, citing Kraft Heinz and General Mills as potential suitors for the takeover.

A follow up piece published just a day before the quarterly report was posted noted that Kraft Heinz is taking a “preliminary look“ at the Campbell acquisition. CPB shares went up 4% on heels of the news.

Spokesmen for both Kraft Heinz and Campbell Soup declined to comment. CNBC released yet another report revealing that Kraft Heinz passed up on the opportunity of acquiring Pinnacle Foods in 2017.

In the regulatory filing to the SEC pertaining to the timeframe in which the talks allegedly took place, Pinnacle revealed that there were brief talks of a merger with an undisclosed company – but that ultimately the mystery company opted out of the deal.

What's your reaction?
Leave a Comment