Kraft Heinz’s sales have been muted for 14 straight quarters as consumers turn to cheaper private-label brands, online shopping and fashionable, non-processed and organic food. Thursday’s results mark the first anniversary of Kraft Heinz reporting a surprise loss and taking a $15.4 billion write-down of key brands — a move that rocked the consumer goods industry and led to the ouster of former chief executive Bernardo Hees and other executives.
At the time, the company also slashed its dividend by 36 percent and disclosed an investigation into its accounting practices by the U.S. Securities and Exchange Commission. In the year since, Kraft Heinz has announced further write-downs, scrapped its full-year adjusted earnings outlook and is still under SEC investigation.
The company, which also makes Oscar Mayer cold cuts and Kraft cheese slices, said fourth-quarter sales declined 5.1 percent due to lower U.S. demand for cheese, coffee, bacon and other products. The company said this was prompted by higher costs for key raw materials — including dairy and meat — that forced Kraft Heinz to raise U.S. prices by 3.1 percentage points.
American picks Seattle as gateway to India
American Airlines Group wants to establish Seattle as an international gateway for westward flights to India and other locations, with help from a reinvigorated partnership with Alaska Air Group.
Nonstop service will begin in October between Seattle and Bangalore, India, the most requested route by big corporate customers, the airlines said in a statement Thursday. American expects to add more flights to India and Asia from Seattle, complementing service to the South Pacific and Europe from the company’s hub in Los Angeles.
The plans will extend American’s expansion of international service, including its first flights to Morocco and Krakow, Poland, and new flights to New Zealand later this year. The initiative with Alaska Air fuels a rivalry with Delta Air Lines, which built Seattle into a hub by more than doubling departures between 2014 and 2019.
American will add flights to London’s Heathrow Airport from Seattle in March 2021.
As many as 15 percent of American’s passengers between Heathrow and Dallas-Fort Worth International travel to India via connecting flights, he said.
— Bloomberg News
Also in Business
Walmart's Jetblack, a personal-shopping service for busy urban families, will cease operations Feb. 21, according to a company spokesman. The brainchild of Walmart's online chief Marc Lore, Jetblack will be integrated into the parent company's operations and its technology applied to other parts of the retailer. Nearly 300 employees will be let go as part of the move, with 58 staying on with Walmart, the spokesman said.
U.S. underlying consumer prices picked up in January, while the number of Americans filing claims for unemployment benefits rose slightly last week, suggesting the economy was stable enough for the Federal Reserve to keep interest rates on hold this year. The reports from the Labor Department on Thursday followed on the heels of Fed Chair Jerome H. Powell's remarks to lawmakers this week that the "economy is in a very good place, performing well." The U.S. central bank last month left interest rates steady. It is widely expected to keep monetary policy on hold this year.
8:30 a.m.: The Commerce Department releases retail sales data for January.
9:15 a.m.: The Federal Reserve releases industrial production for January.
— From news services