Kraft to Retool Financial Results After Misconduct Investigation

Kraft Heinz has come under regulatory scrutiny for accounting errors that have been traced back to run as far as several years deep.

In light of this financial misconduct, the company is restating a plethora of its financial results, some of which go back to 2016. After adjustments, it was found that there was a discrepancy of around $208 million that the company is now accounting for.

The food behemoth has chalked down some of the errors to procurement practices, in which it found evidence of employee misconduct that increased the cost of goods sold: "During the course of a thorough internal investigation, some discrepancies were uncovered which affected the way earnings were calculated between periods," Kraft Heinz said in a filing. "The findings from the investigation did not identify any misconduct by any member of the senior management team," a company spokesman further elaborated.

Whats more is that Kraft also has missed a series of important financial reporting deadlines in the past, around the same time it announced that it was writing down the value of a handful of its subsets by $15 billion. This has left investors extremely concerned, particularly because the company has also been erratic with responding to them about existing woes.

Warren Buffet, Kraft's biggest investor and the owner of Berkshire Hathaway, which has a 26.7% stake in the company, maintains that Kraft has his support and insists that the corporation will survive this issue. Buffet has a lot invested in the company; not only fiscally, but also, personally. He spearheaded the Kraft Heinz merger in 2015 along with 3G capital, which helped the company cut costs and boost margins. Therefore, his vote of confidence is a matter of great importance, particularly as a symbol of stability for anxious investors.

"While we expect there will be more change, the worst of the uncertainty surrounding financial statements appears to be over," Consumer Edge Research's Jonathan Feeney said.