First quarter sales up 6% at Kraft Heinz as consumers stock up amid shutdowns.
Speculation has continued for more than a year that Kraft Heinz will sell its Maxwell House coffee brand because of declining sales.
However, sales of Maxwell House and other coffee brands are surging these days because of the COVID-19 pandemic.
Coffee lovers are unable to get out to their favorite cafes and instead are turning to packaged brands they can buy in the grocery store, according to a report last week by Fox Business News.
The report cited data from market research firm Nielsen saying U.S. packaged coffee sales jumped 24.9% over a four-week period and Kraft Heinz increased coffee sales by 18.7%.
Maxwell House is the major coffee brand for Kraft Heinz. Its only remaining Maxwell House plant in the U.S. is its Downtown Jacksonville facility at 735 E. Bay St., which employs about 200 people.
Without discussing specific food items, Kraft Heinz said April 6 that first-quarter sales rose by about 6% organically because of strong consumer demand during the pandemic shutdowns. The company had been projecting a decline in sales.
Kraft Heinz had scheduled an investor day presentation in May to discuss turnaround strategies, but said it is postponing that meeting until later in the year.
“Given the current, unprecedented COVID-19 challenge, we believe it is better for Kraft Heinz, our shareholders and our customers that we continue our single-minded focus on getting our products from our plants to stores and onto consumers’ tables,” CEO Miguel Patricio said in a news release.
Dick’s Wings parent expects months of negative impact
Not surprisingly, the COVID-19 pandemic is hurting Jacksonville-based ARC Group Inc., parent company of Dick’s Wings & Grill and two other restaurant chains.
ARC Group, which also owns the Fat Patty’s and WingHouse Bar and Grill chains, is offering takeout and delivery at some of its restaurants but has closed some locations where sales are not sufficient to keep operating.
CEO Seenu Kasturi said in a news release he expects COVID-19 to “have a significant negative impact on our results of operations during the next several months.”
Four Dick’s Wings restaurants are company-owned and the other 16 are operated by franchisees. The company said it postponed collecting royalties from franchised restaurants for four weeks starting on March 17.
“We are aware of the overall impact the decreased traffic is having on our franchisees’ restaurants and that we will need to support our franchisees during this difficult period. We are hopeful that our landlords and other partners will do their part as well,” Kasturi said.
Duos Technologies not reducing growth projections
Duos Technologies Group Inc. reported higher fourth-quarter revenue last week and said the COVID-19 pandemic is not reducing growth projections for 2020.
However, the Jacksonville-based provider of intelligent security analytical technology said the pandemic could shift revenue expected in the first half of 2020 into the latter part of the year.
Duos Technologies reported earnings of $592,000 for the fourth quarter, reversing a loss in the fourth quarter of 2018 as revenue more than doubled to $5.75 million.
Revenue for all of 2019 rose 13% to $13.64 million and the company has been projecting revenue to reach $20 million this year.
In a news release, Duos Technologies said its work on “essential” infrastructure projects is continuing and its supply chain has not been affected by COVID-19.
“We have also maintained consistent communications with our clients and put a plan in place to ensure ongoing business continuity. While we still expect to generate robust double-digit growth in 2020, we are refraining from providing updated annual revenue expectations until more reliable information becomes available,” CEO Gianni Arcaini said in the release.
ComSovereign is producing face shields
ComSovereign Holding Corp. last week said a newly acquired plastics manufacturing business received a contract to make face shields for protection against the COVID-19 virus.
ComSovereign was formed through a merger in November with Jacksonville-based Drone Aviation Holding Corp. as a holding company for communications technology businesses.
The company now based in Dallas announced March 19 it acquired the plastics business in Colorado Springs and renamed it Sovereign Plastics.
The plastics company expects to begin production of the face masks next week.
“We are honored to commit our available production capacity to the rapid manufacture of face shields for distribution by our customer to its end users in the fight against COVID-19,” ComSovereign CEO Dan Hodges said in a news release.
The contract also should be profitable for the company, with a net margin of more than $500,000 a month from the face mask production, it said.
ComSovereign has not reported year-end results but said pro forma revenue of its merged businesses was about $11.8 million in 2019.
Hedge fund increases stake in broadcaster Tegna
A hedge fund waging a proxy fight against Tegna Inc. bought additional shares of the broadcasting company last week.
Standard General L.P. said in a Securities and Exchange Commission filing it bought 4.6 million Tegna shares on April 2 at $11.075 each, raising its stake in the company from 9.7% to 11.8%.
Standard General is nominating four candidates to replace directors on Tegna’s board, saying it is dissatisfied with the company’s performance.
“This increase in our position underscores our conviction that the Company’s intrinsic value is much higher than its market price, but also our belief that Tegna will not achieve its full potential without an upgraded Board,” Standard General founding partner Soo Kim said in a news release.
Tegna’s stock dropped to new lows last week after it acknowledged reports that it received unsolicited acquisition proposals from four parties but broke off discussions with two of them.
Tegna owns 62 U.S. television stations, including Jacksonville NBC affiliate WTLV TV-12 and ABC affiliate WJXX TV-25.
Creative Learning reports profit
Creative Learning Corp. filed its annual report last week showing a profit for the fiscal year ended Sept. 30, as it moved its corporate offices from St. Augustine to Boise, Idaho.
The company, which employed seven people at the end of the fiscal year, offers educational and enrichment programs for children through franchisees.
Creative Learning reported earnings of $2 million, or 17 cents a share, for the year, reversing a loss the previous year. Revenue nearly doubled to $4.5 million.
The report filed with the SEC said Creative Learning sold its two remaining office condominiums in Florida after the end of the fiscal year and rented office space in Boise.
Laffer leaves GEE Group board
Jacksonville-based staffing company GEE Group Inc. appointed three new directors to its board last week but also said well-known economist Arthur Laffer resigned from the board.
The company said Laffer resigned because of time constraints of his economic advisory workload.
Laffer became famous in the 1980s as an adviser to President Ronald Reagan for his advocacy of supply-side economics.
He has a longtime association with GEE Group Chief Executive Derek Dewan. He served on the board of Jacksonville-based MPS Group Inc. when Dewan was chairman of that company, which was acquired by Adecco Group in 2010.
Laffer joined the board of GEE Group in 2015.
The new directors on GEE’s board are Carl Camden, the former CEO of global staffing firm Kelly Services; Matthew Gormly, managing partner of consulting firm ReynoldsGormly & Co. LLC: and business consultant Thomas Vetrano.