NEW YORK (AP) — Kraft Foods said Thursday that cost cutting and one-time gains helped boost its quarterly profit, but its sales just missed Wall Street expectations.
The maker of Oscar Mayer meats and Jell-O pudding said its core revenue rose 3.2 percent, as higher volumes offset reduced prices. The results benefited from an easy comparison from a year earlier, when retailers didn't buy as much because they were stocked up on inventory in preparation for Kraft's split from Mondelez.
That split in late 2012 was intended to allow each company to focus on a more targeted stable of brands. Mondelez walked away with global snack brands with bigger growth potential, such as Oreo and Chips Ahoy. Kraft held onto brands such as Maxwell House, Miracle Whip and Planters, which are sold chiefly in the saturated North American market.
In an earnings call, CEO Tony Vernon also noted that Kraft faced "continuing headwinds in the near term," due to factors such as the cut in SNAP benefits, formerly known as food stamps, and the weak job market.
But he nevertheless expressed confidence for the future, noting the company's plans to revive the dated images of brands such as Kool-Aid, Jell-O and Crystal Light. Vernon pointed to Kraft's improved cheese business as an example of what it could do with other areas.