Kraft Foods' profit melts away in third quarter

Kraft Foods' profit melts away in third quarter

American Kraft Foods has seen its profits drop while turnover levels remained the same. "Our price policy strategy, based on raw materials, has proven to be successful up until now, but we have had flawed execution in other areas", CEO Tony Vernon admitted.

Higher prices, larger discounts

Kraft Foods' net profit dropped nearly 11 % compared to the year before, to 446 million dollars (350 million euro). Turnover remained level at 4.4 billion dollars (3.5 billion euro), slightly lower than analysts' expectations.

 

The company says it has managed to increase the price for more than 50 % of its product range to offset the increased cost of raw materials. The result was that, for some products, sales lagged behind. On top of that, in order to stimulate meal and dessert sales, the group was forced to hand out larger discounts and take a 6.7 % turnover hit in that branch. All in all, Kraft's gross margin reached 29.3 % in the previous quarter, down from 33.8 % the year before.

Questions or comments? Please feel free to contact the editors


Hugo Boss reaches growth targets for 2017

16/01/2018

German fashion brand Hugo Boss managed to reach its targets for 2017, partially thanks to strong fourth quarter growth. For its full fiscal year, turnover grew 3 % if we ignore exchange rate fluctuations.

C&A owners consider sale to Chinese investors

15/01/2018

The Dutch Brenninkmeijer family is considering to sell clothing chain C&A according to German magazine Der Spiegel. One option is to sell to Chinese buyers.

Gucci opens restaurant and museum in Florence

12/01/2018

Fashion brand Gucci opened a museum and a restaurant for fifty people in Florence. Three-star chef Massimo Bottura will serve high-quality meals there.

 

Kering hands over control of Puma

12/01/2018

French luxury group Kering will get rid of 70 % of German sports brand Puma’s shares and wants to turn its attention to its luxury brands. Puma does not fit into that category.

Luxury group Richemont grows 7 percent

11/01/2018

French luxury group Richemont achieved a 7 % third quarter revenue increase. Unfortunately, exchange rate fluctuations eliminated nearly everything.

Uniqlo's parent company posts record profit

11/01/2018

Japanese fashion brand Uniqlo’s parent company, Fast Retailing, has posted a record first quarter profit. A huge growth in its foreign sales means they are now larger than its Japanese turnover, for the first time ever.

Back to top