Kraft Foods' profit melts away in third quarter | RetailDetail

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

Dior exchanges Belgian CFO for British one


After eleven years as Dior Homme’s Chief Creative Officer, Belgian Kris Van Assche is to leave the fashion label to find new challenges. British designer Kim Jones will replace him.

Suitcase brand Rimowa cancels all dealer contracts


Suitcase brand Rimowa, part of luxury group LVMH since 2016, has stopped all of its dealer contracts. It wants to initiate a new procedure soon and only a fraction of the current dealers will get a new contract.

H&M disappoints once again


Swedish fashion chain Hennes & Mauritz had to present less than favourable results for its new fiscal year: investor trust has dwindled, now that sales in its home territory have also dropped for the first time in decades.

Bureau of Competition approves Yoox Net-a-Porter bid


The Italian Bureau of Competition has approved Swiss Richemont’s acquisition of Italian fashion webshop Yoox Net-a-Porter. The full bid, yet to be accepted, values the company at 2.7 billion euro.

Donatella Versace stops using fur


Italian fashion brand Versace will no longer use fur: designer Donatella Versace no longer wants to kill animals for fashion, she explained in an interview with The Economist.

"Best year ever" for Danish shoe brand Ecco


Ecco can look back on 2017 as its best financial year ever. The Danish shoe brand, known for its “follow the foot” philosophy, exceeded its own expectations thanks to an 8 % growth.

Back to top