Americans are stuck at home, which means they're eating out less and eating at home more. This is welcome news for food giant Kraft Heinz.
The macaroni and cheese and ketchup king reported sales and earnings that topped forecasts Thursday. The company posted solid sales gains at its US retail business, citing strong demand from consumers due to the Covid-19 outbreak. Still, shares of Kraft Heinz fell 6% in late morning trading Thursday.
Kraft Heinz has been in turnaround mode for the past few years. The company has been struggling to catch up with rivals that have launched more innovative food products as consumers sought out healthier organic foods as well as plant-based alternatives to meat.
But Kraft Heinz has rebounded in 2020 under the leadership of new CEO Miguel Patricio, who has been aggressively writing down poorly performing brands to focus more on core products that are continuing to do well.
"Our response to the ongoing COVID-19 pandemic reflects the hard work and dedication of our remarkable employees around the world," said Patricio in a statement. "We are now starting to realize the benefits of agility and scale."
Along those lines, Kraft Heinz announced it was taking nearly $3 billion in charges in the second quarter to reflect goodwill impairment charges of $1.8 billion for some of its reporting units and $1.1 billion in charges due to the poor performance of Oscar Mayer, Maxwell House and other brands.
Shares of Kraft Heinz are now up nearly 5% this year. The solid earnings report is good news for the company's most high profile backers as well -- private equity firm 3G Capital and Warren Buffett's Berkshire Hathaway. Berkshire and 3G teamed up in 2013 to buy Heinz and merged it with Kraft two years later.