For the second fiscal quarter ended June 29, 2013, the company reported net revenues of $4.74 billion, a slight decline of 1.1 percent. Net earnings for the quarter were $829 million, $1.38 per diluted share, compared to $603 million, or $1.02 per share, in the comparable year ago quarter.
“We continue to make meaningful progress on cost savings, cash flow, market share and building our brands for the long term,” said Tony Vernon, CEO of Kraft. “Our brand investments and top-line growth in the second quarter were held back by the return discipline we’re applying to marketing, promotion and innovation. We expect to see profitable growth from a stronger base going forward and greater revenue growth in subsequent quarters, as more new initiatives come to market.”
In the Refrigerated Meals segment, net revenues for the quarter slipped 0.7 percent. Volume softness in cold cuts and the impact of Easter shipment timing on bacon volume compared to a year ago offset ongoing revenue growth from Lunchables innovations and higher prices to cover higher commodity costs, the company said. Operating income declined on higher commodity costs. Kraft is the maker of Oscar Mayer brand deli meats.
Net revenues in the Grocery segment declined 6.7 percent on weakness in dressings and Jell-O.
Kraft updated its 2013 guidance. The company expects organic net revenue growth to be in line with or slightly lower than growth in the North American food and beverage market. Earnings per share are forecast at approximately $3.40 compared to approximately $2.75 previously. Free cash flow is estimated at approximately $1.2 billion compared to the company's previous guidance of approximately $1.0 billion.
“Our focus on cost and cash is providing the fuel to reinvest in our brands while delivering better-than-expected Free Cash Flow,” said Tim McLevish, CFO of Kraft.