The Kraft Heinz food empire has a debt problem.
going back to records that began in 1947, according to the Office of Financial Research, a Treasury Department bureau created after the 2008 financial crisis.
The balance sheet could come under even more strain this year. Kraft Heinz projected that 2019 earnings will fall sharply to about $6.4 billion. That would lift its leverage level to the uncomfortably high multiple of 4.8.The Kraft Heinz disaster demonstrates how piling on tons of debt can be problematic when a management team's strategy misfires.Kraft Heinz slashed its dividend by 36% to save cash that can be used to pay down debt.
"The overwhelming emphasis on taking costs out and improving margins has come at the expense of the company's long-term health," said Erin Lash, a Morningstar analyst.She noted that Heinz's leverage shot up to 4.8 times earnings at the end of 2014 following the takeover by 3G Capital.
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