Kraft Foods Group Inc.
) macaroni and cheese products have been recalled which were sold
by its Kentucky-based distributor Truitt Brothers Inc. Truitt
Brothers have recalled 1.77 million pounds of macaroni and cheese
products, which are known as Kraft Velveeta Cheesy skilled
Incorrect labeling led to the recall of Kraft Velveeta Cheesy
skilled single. Velveeta is one of the iconic brands of Kraft
Foods which had reported decent growth in the third quarter of
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Kraft Velveeta Cheesy skilled single is a macaroni and cheese
product containing pasta and ground beef. The macaroni and cheese
products contain hydrolyzed soy protein and dried soy sauce,
which are also known allergens. However, these ingredients were
not mentioned on labels of some of the products manufactured
between May 6, 2013 and Jan. 16, 2014. However, there have been
no reports of adverse reactions due to consumption of these
Dinner and cheese slices under the brand Kraft's Velveeta brand
witnessed steady growth in the third quarter of 2013 which were
reported on Oct 30, 2013. However, Kraft's third-quarter net
revenue declined year over year and also missed the Zacks
Consensus Estimate due to lower volume and pricing.
Kraft's third-quarter 2013 adjusted earnings per share of $0.65
fell short of the Zacks Consensus Estimate of $0.68 by 4.4%.
Adjusted earnings were also lower year over year due to a weak
top line, higher interest expense as well as tax rate.
Several of the company's product categories witnessed softness in
the quarter due to lower consumption and increased competitive
activity. Especially, salad dressings, powdered beverages and
ready-to-eat desserts declined in the quarter. Management
highlighted at the call that shopper trips are going down,
especially the large ones as consumers are still purchasing only
what they need. Traffic is only growing in the club and dollar
However, the company has strong fundamentals. Kraft's aggressive
cost reduction and efficiency-improvement initiatives remain on
track providing cash to invest in innovation, brand-building and
marketing initiatives. Moreover, Kraft is focusing on building
shareholders' value through share buybacks and regular dividend
Kraft Foods Group currently carries a Zacks Rank #2 (Buy).
Other companies in the consumer goods sector that warrant
investor attention include
Post Holdings, Inc.
The Chefs' Warehouse, Inc.
ConAgra Foods, Inc.
). Post Holdings carries a Zacks Rank #1 (Strong Buy), whereas
The Chefs' Warehouse and ConAgra Foods carry a Zacks Rank #2.