Kraft revenue misses on weak Jell-O, mayo sales
(Reuters) - Kraft Foods Group Inc (KRFT.O) reported lower-than-expected quarterly revenue on Wednesday, hurt by lower prices on some beverages, and by soft sales of mayonnaise, salad dressing and Jell-O desserts.
Net revenue declined 4.2 percent to $4.39 billion, in large part because a year earlier Kraft had higher shipments to retailers ahead of its spin-off from Mondelez International Inc (MDLZ.O). About 1 percentage point of that was from lower pricing to attract customers.
Still, Wall Street was expecting $4.56 billion, according to Thomson Reuters I/B/E/S.
Shares were down 0.8 percent at $55 in after-hours trading.
"There's no question it's a difficult environment for our consumers and customers," Chief Executive Tony Vernon said in a statement.
Kraft lowered prices on beverages including Kool-Aid Jammers during the quarter. Bright spots included sales of Planters peanuts, Kraft's cheese business, and Velveeta dinners.
The company said it still expects organic revenue growth to be in line with, or slightly lower than, the growth of the North American food and beverage market.
"The competitive environment remains incredibly intense," said Morningstar analyst Erin Lash.
The maker of Maxwell House coffee and other products said third-quarter net income rose to $500 million, or 83 cents per share, from $466 million or 79 cents per share a year ago. Kraft was helped by cost savings such as a reduction in ad spending in some of its businesses.
(Editing by Matthew Lewis)
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