Kraft Foods Group today (15 February) said it expected to file a near-11% fall in revenues for the last three months of 2012, with sales down across the US grocery group’s businesses.
The Oscar Mayer meats firm, which was formed when Kraft Foods split in two last autumn, will post its full financial results next month but today provided an update to the market.
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Fourth-quarter net sales are expected to have dropped 10.7% in the quarter to 29 December to $4.49bn. Kraft pointed to the extra week in last year’s trading period but admitted net revenue was 7.2% lower on an organic basis. It cited “reductions in trade inventories” and a smaller impact from “pruning” of its portfolio.
Operating income was down 48.8% at $260m, while net earnings was 72.1% lower at $89m. Kraft incurred charges linked to the split and wider restructuring, as well as changes to its pension scheme.
Kraft formally listed in October in its new form but also provided results for the whole of the year. Net earnings were down 7.5%, while operating income dropped 5.6%. Net sales slid 1.7%.
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The company has lifted its forecast for earnings per share in 2013. It now expects $2.75 per diluted share, compared to a previous forecast of $2.60. Changes to how Kraft accounts for pension costs accounts for most of the benefit.
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