Characters at the Berkshire Hathaway booth, Kraft Heinz, pose with a reporter on shareholder shopping day as part of Berkshire Hathaway's annual gathering weekend in Omaha, Nebraska, May 5, 2017.
Rick Wilking | Reuters
Kraft Heinz told investors Tuesday that they would save $ 2 billion in costs through 2024 as part of their turnaround plan.
The company also expects long-term organic sales growth of 1% to 2% and adjusted earnings per share growth of 4% to 6%. Oscar Mayer's owner said the financial targets reflect confidence in the ongoing recovery.
Kraft Heinz shares rose 2% in premarket trading after the announcement. With a market value of $ 39.8 billion, the stock is up 1% so far this year.
CEO Miguel Patricio said during investor presentations that the cost savings will boost his investment in Kraft Heinz again. For example, the company will increase its marketing and advertising spend by 30%.
"We are determined to lead Kraft Heinz to constant growth at both the top and bottom," said CFO Paulo Basilio in a statement.
In recent years, Kraft Heinz has struggled with consumers shopping more near the grocery store in search of fresh food. The drop in sales led the food giant to report billions in write-downs on some of its brands, including Cool Whip, Oscar Mayer, Kraft and Maxwell House, and to reorganize its leadership.
However, the coronavirus pandemic has boosted the company's sales and helped it make its comeback. Kraft Heinz updated its outlook for the third quarter on Tuesday and now expects organic sales growth in the mid-single-digit range.
The company will announce its quarterly results in October.
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