Financial analyst: New Kraft Heinz CEO faces ‘monumental challenge’ |

Financial analyst: New Kraft Heinz CEO faces ‘monumental challenge’

Patrick Varine
Associated Press

A financial securities analyst says the Kraft Heinz Company may be running out of cash, and its new CEO has a “monumental challenge” on his hands.

Guggenheim Securities analyst Laurent Grandet told Yahoo! News that Miguel Patricio, who will take the company’s CEO reins on July 1, will need to invest between $700 million and $800 million over the next two years to jump-start sales growth and “aggressively” sell nearly $7 billion in assets and slash dividends by 50 percent to conserve cash.

Without those moves, Grandet thinks Kraft Heinz could run out of cash by 2020.

The company’s stock was trading at a high of $48.18 on Feb. 21 before a precipitous drop the next day to $34.95.

The drop came as Kraft Heinz officials announced a $15.4 billion write-down to the Kraft and Oscar Meyer trademarks as well as the arrival of a U.S. Securities & Exchange Commission subpoena regarding an investigation of its accounting practices.

Patricio will take over for Bernardo Hees, who has led the company since 2015.

Financial services company Standard & Poor’s is taking a dim view of Kraft Heinz’s stock as of June 20:

That makes sense, given its recent drop in 2019 alone:

Some financial analysts think part of the company’s problem is struggling to adapt to younger customers’ tastes and preferences:

And if social media is any indicator, the company’s recent idea to blend ketchup and mayonnaise with other condiments may not have been the best move:

The Mayochup has its fans, though:

But even teaming up with pop singer Ed Sheeran on National Ketchup Day doesn’t seem to be helping the company’s prospects:

Patricio wants to hit the ground running, telling Forbes shortly after his hiring announcement that the company has to “understand the consumer better than anyone else” and that he would like to focus initially on the company’s Philadelphia, Heinz and Planter’s brands.

Patrick Varine is a Tribune-Review staff writer. You can contact Patrick at 724-850-2862, [email protected] or via Twitter .

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