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Kraft Heinz Sales Finally Grow, But Not Enough for Wall Street

  • Revenue rises for first time since 2015 merger created company
  • Even so, shares drop as weakness noted across product lines

It’s going to take more than a little bit of sales growth to mollify Kraft Heinz Co. investors.

The shares declined in late trading, even after the maker of ketchup and Oscar Meyer hot dogs posted its first-ever sales increase. Underneath the revenue expansion, which still fell short of analysts’ expectations, was a weak performance across a swath of categories including nuts, cheese, meat and coffee, with the company citing fierce grocery-industry competition.

“There’s no question that the retail environment, particularly in the United States, will remain both dynamic and challenging,” Chief Executive Officer Bernardo Hees said in a statement.

Kraft Heinz posted third-quarter sales of $6.31 billion, just short of analysts’ forecast of $6.33 billion. The organic revenue expansion of 0.3 percent from a year earlier didn’t meet the estimate of 1.5 percent.

The company has struggled to prove it can boost sales on its own since it was created in a blockbuster 2015 merger. A bid to expand rapidly by purchasing Unilever failed earlier this year. Updates to core products to make them more appealing to consumers, including organic Capri Sun juice and hot dogs with fewer artificial ingredients, also haven’t shown a big payoff yet.

The shares fell as much as 3.1 percent to $75.30 in late trading after the announcement. Kraft Heinz stock has dropped 11 percent this year.