* Sees 4th-quarter profit of 15 cts/shr after items
* Raises 2013 profit forecast to $2.75/shr from $2.60
* Shares edge higher
By Martinne Geller
Feb 15 Kraft Foods Group Inc said on
Friday it expects to report a 10.7 percent decline in
fourth-quarter revenue, saying it failed to adequately tailor
some products, particularly its Oscar Mayer lunch meat, to meet
consumer demand for lower-priced foods.
The news from Kraft comes on the heels of disappointing
results from Mondelez International, which used to be
combined with Kraft before the companies split late last year.
"We definitely stubbed our toe this quarter," Chief
Executive Tony Vernon told analysts on a conference call. He
said sales were hurt after rivals launched lower-priced items
that Kraft did not match.
As an example, Vernon cited the differing performances of
its Kraft Macaroni and Cheese and its Oscar Mayer lunch meat.
After a "formidable entry from a significant industry
player" in the packaged macaroni and cheese business, Kraft
stepped up with bonus packages, promotions, new products and
increased advertising. It saw macaroni and cheese sales grow 11
On the other hand, Vernon said, the company's Oscar Mayer
lunch meat brand stood by and watched as it experienced a "major
share loss in the fourth quarter" to a new value-priced offering
from a competitor.
"In hindsight I regret not responding on cold cuts exactly
the way we responded on mac & cheese," Vernon said.
Kraft said it now expects full-year 2013 earnings of about
$2.75 per share, up from a previous forecast of $2.60 per share.
The company expects fourth-quarter earnings of about 15
cents per share, including a one-time, non-cash charge of about
24 cents for post-employment benefits, 14 cents of restructuring
charges, and a charge of 4 cents related to hedging activities.
The company plans to issue final 2012 results by March 29.
Shares were up 0.3 percent in morning trading.