What happened
Kraft Heinz (KHC -0.52%) shares trailed the market last month, shedding 15% compared to a 4% decrease in the S&P 500, according to data provided by S&P Global Market Intelligence.
Kraft Heinz investors have now seen their stock fall by about 25% in the past 52 weeks, compared to a 14% increase for the broader market.
So what
February's drop followed fiscal fourth-quarter results that disappointed Kraft Heinz's management team and investors alike. Organic sales fell 0.6% and earnings ticked down to $0.90 per share from $0.91 per share a year ago to keep both growth figures in negative territory for the year. "There's no question that our financial performance in 2017 did not reflect our progress or potential," CEO Bernardo Hees said in a mid-February press release.
Image source: Getty Images.
Now what
In a subsequent conference call with Wall Street analysts, Hees said the team is "cautiously optimistic" about their ability to reignite sales growth in 2018. The biggest challenge is a brutally competitive market in the U.S., where most packaged foods giants are facing a painful trade-off between lower prices and reduced market share. That situation is likely to keep pressure both on profit margin and organic sales gains in 2018, but management is hopeful that trends will improve as the fiscal year progresses.
