Kraft Heinz's stock on Friday closed at the lowest level in its history after the food and beverage retailer disclosed on Thursday a Securities and Exchange Commission investigation into the firm's accounting policies. The company also slashed its quarterly dividend to 40 cents per share annually -- down from $2.50 -- and reduced the value of its key brands by $15 billion.
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Warren Buffett's Berkshire Hathaway is the largest owner of the company's shares, which booked their largest one-day plunge ever.
|KHC||KRAFT HEINZ COMPANY||31.09||-0.36||-1.14%|
The investigation by the SEC centers on Kraft’s policies related to procurement, including its agreements with vendors, according to a disclosure included in the Chicago-based firm’s fourth quarter earnings statement.
“Following this initial SEC document request, the company together with external counsel launched an investigation into the procurement area,” Kraft said. “As a result of findings from the investigation, the company recorded a $25 million increase to costs of products sold as an out of period correction.”
The conglomerate also said it is improving “internal controls to mitigate the likelihood of this occurring in the future.” Kraft does not expect the investigation to affect current or previous quarterly earnings statements.
In the three months through December, sales at Kraft grew slightly to $6.9 billion, while earnings fell to 84 cents per share – both less than analyst expectations.