H.J. Heinz Co and Kraft Foods Group Inc. now known as Kraft Heinz Co. both reported a drop in revenue before the merger happened in July.
Kraft's net revenue fell from $4.75 billion to $ 4.52 billion, while Heinz's fell from $ 2.73 billion $2.62 billion, Reuters reported. According to reports, sales at Kraft dropped because of the weak beverage demand, which resulted from fewer promotions compared to last year, while strong dollar hurt the sales at Heinz.
"The company is focused on the difficult and challenging process of integrating our two businesses," Bernardo Hees, Kraft Heinz's Chief Executive Officer said in a statement.
"We have a lot of hard work ahead of us as we continue to design our new organization, always putting our consumers first," he added.
The merger of Heinz — backed by Warren Buffet's Berkshire Hathaway Inc. and 3G Capital, a Brazilian private equity firm — and Kraft Foods Group was completed in July 2, just a few days after the end of the second fiscal quarters for the two companies.
Kraft Heinz's new management team is made up mostly of executives associated with 3G. They plan to increase the profit margin by cutting $1.5 billion from the costs of the company's combined annual budget by the end of 2017, according to The Wall Street Journal.
The drop in the sales revenue for many brands over the recent years was also attributed to the grocery shoppers shift toward ess-processed foods.
Despite the fall in revenue by 4 percent this quarter, Heinz reported an increase in the operating income from $874 million to $923 million. While Kraft, reported a quarterly profit of $551 million compared with $482 million.
The news release of Kraft Heinz gave no update on the new company, neither an additional outlook. The executives did not hold any conference calls either to discuss the results. Although, on Aug. 14, a listen-only call was scheduled for the bondholders.
Kraft Heinz fell by 1.9 percent to $77.35 in late trading at New York, as per the report of Bloomberg, Tuesday.
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