Kraft Foods Group Inc. (KRFT): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Kraft reported strong fourth-quarter 2014 results beating the Zacks Consensus Estimate for both earnings and sales as volumes improved. However, strong fourth quarter results were overshadowed by the announcement of the departure of its chief operating officer (COO) and two other executive officers Though some positive developments aided the fourth-quarter top line, Kraft's overall performance was below expectations in 2014. Price increases to cover rising commodity costs and softness in certain categories due to the lack of innovation/brand building activities hurt sales in the year. Kraft's organic sales growth lagged market expectations in 2014 and we do not expect it to improve much in 2015. In addition, rising food costs, increasing competitive pressures and challenging industry conditions concern us. However, Kraft's strong brand portfolio, successful innovation, aggressive cost reduction and efficiency-improvement initiatives keep our faith in the stock.


Overview:

Headquartered in Northfield, IL, Kraft Foods Group, Inc. (KRFT) is one of the largest consumer packaged food and beverage companies in North America. It sells branded products in beverages, cheese, coffee, refrigerated meals and grocery categories, mainly across the U.S. and Canada. Some of its popular brands include Kraft, Maxwell House, Oscar Mayer, Planters and JELL-O.

Kraft Foods Group was spun off from Mondelez International into a separate independent company on Oct 1, 2012, and consists of the North American grocery business of the old Kraft Foods.

Kraft's reportable segments are Beverages, Cheese, Refrigerated Meals, Meals & Desserts, Enhancers & Snack Nuts, and Canada. The remaining businesses including Foodservice and other international businesses are clubbed under "Other Businesses".

Management's long-term growth targets include organic sales growth at or above market growth of the North American food and beverage industry, mid single-digit operating income growth and mid-to-high single-digit earnings growth.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Stocks

Referenced Stocks: COO , KRFT

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