Kraft Foods Group has reported a decline in profit for the third quarter, owing to higher commodity costs that offset a marginal climb in sales, with weak operating margins pronounced at the cheese, and meals and desserts segments.
The chain reported quarterly net earnings of $446m, compared with $500m last year. Sales for the third quarter rose 0.1% from last year to $4.40bn.
Sales at the company's cheese segment rose 1.6% from the prior year, due mainly to higher price levels. Nevertheless, operating income at the segment fell 15.8%, due mainly to higher input costs and lower volume/mix.
Refrigerated meals sales increased 3.4%, led by price increases and volume/mix gains. Beverages sales were up 0.5% compared with a year ago.
Meals and desserts sales slid 6.7%, hurt by weak demand and higher promotional costs, with operating income slipping 8.2%. Enhancers and snack nuts sales fell 2.5%.
Net revenues of $471m declined 2.5%, due to lower net pricing and lower sales to Mondelez that were partially offset by favourable volume/mix.
Sales in Canada fell 4.2% to $454m due to unfavorable currency impact, while sales in other businesses gained 5.8%. Cost of sales for the quarter increased 6.9% from last year.
