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Kraft Heinz targets $2 billion in cost cuts over 5 years, sees long-term organic net sales growth of 1% to 2%

Characters at the Berkshire Hathaway company Kraft Heinz booth pose with a reporter at the shareholder shopping day as part of the Berkshire Hathaway annual meeting weekend in Omaha, Nebraska, May 5, 2017.

Rick Wilking | Reuters

Kraft Heinz on Tuesday told investors it would cut $2 billion in costs through 2024 as part of its turnaround plan.

The company is also expecting long-term organic sales growth of 1% to 2% and adjusted earnings per share growth of 4% to 6%. CEO Miguel Patricio said during investor presentations that the cost savings will fuel its investment back into Kraft Heinz. The Oscar Mayer owner said the targets reflect its confidence in its ongoing recovery.

Shares of Kraft Heinz rose 2% in premarket trading on the announcement.

“We are committed to returning Kraft Heinz to consistent growth on both the top and bottom lines,” CFO Paulo Basilio said in a statement.

In recent years, Kraft Heinz has struggled as consumers shopped more around the perimeter of the grocery store in search of fresh foods. The sales downturn led the food giant to report billions of dollars in write-downs on some of its brands, including Cool Whip, Oscar Mayer, Kraft and Maxwell House, and to reshuffle its leadership.

However, the coronavirus pandemic has lifted sales for the company, helping it during its comeback. Kraft Heinz updated its third-quarter outlook on Tuesday, saying it now expects organic sales growth in the mid-single digits.

The company will announce its quarterly results in October.

This is a breaking news story. Please check back for updates. 

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