CHICAGO — Kraft Heinz Co. management attributed weak first-quarter results to reduced Supplemental Nutrition and Assistance Program (SNAP) benefits and softness in the company’s away-from-home business, and expressed optimism the company’s performance would improve in the second quarter.

However, management’s optimism was unfounded as the company continued to struggle in the second quarter.

Carlos Abrams-Rivera, chief executive officer, said the business’ weaker-than-expected second quarter results reflected a “challenged consumer environment” that was “worse than we anticipated.”

“These dynamics are now expected to continue for longer, which has led to a delayed recovery for growth across the industry,” he said in prepared remarks issued July 31. “As a result, we are now expecting a more gradual top-line improvement from the second quarter into the back half of the year.”

Kraft Heinz Co.’s net income for the period ended June 29 was $102 million, equal to 8¢ per share on the common stock, and a significant decline from the second quarter of fiscal 2023 when the company earned $1 billion, or 81¢ per share.

A goodwill impairment charge of $854 million in the company’s meat and cheese business pressured results and was attributed to the recent restructuring of Kraft Heinz’s business units.

Contributing to the company’s net income in the second quarter of fiscal 2023 were unrealized gains on commodity hedges in 2023 compared to unrealized losses on commodity hedges the year before.

The company’s fiscal 2024 second-quarter sales fell to $6.48 billion from $6.72 billion. Organic net sales declined by 2.4% to $6.52 billion compared with the prior year of $6.69 billion and primarily was due to continued consumer pressure and a decline in Lunchables sales, according to the company.

“Starting at the beginning of the quarter, we saw a decline in (Lunchables) sales, but we feel good about the recent improved trajectory,” Abrams-Rivera said. “To build on that momentum, we are deploying a comprehensive strategy across marketing, renovation and innovation. We’re investing in R&D and doubling our marketing spend while optimizing our media mix, targeting strategies and increasing our value equation.”

North America business unit sales were $4.92 billion during the quarter, down 3.1 % from $5.08 billion the year before.

Segment operating income was $1.34 billion during the quarter, up from $1.25 billion the year before. Andre Maciel, chief financial officer, attributed the operating income growth to productivity gains made during the quarter.

International and developed markets sales fell 5% to $885 million during the quarter from $932 million the year before. Segment operating income fell 10% to $126 million from $140 million in fiscal 2023.

“Price was down primarily as a result of increased trade in the UK to selectively lower our price gaps,” Maciel said. “Volumes declined in part as we work through a customer negotiation.”

In emerging markets, sales fell 5.7% to $670 million from $710 million the year before. Operating income fell 33% to $66 million from $97 million.

“Our China business had a negative impact on emerging markets top line due to worsening consumer sentiment,” Maciel said. “To a lesser degree, Brazil had challenges with both the consumer environment — resulting in negative price from value-seeking behavior in commodity categories — and the customer environment, where retailers reduced their inventory levels.”

As a result of the weak quarter, management lowered its organic net sales guidance for the rest of the year from zero to 2% growth to zero to a negative 2% decline.

“This change contemplates a slower recovery than originally anticipated in the US and emerging markets,” Maciel said.

Adjusted operating income guidance was updated to 1% to 3% for the year, down from the previous expectation of 2% to 4% growth.