(Reuters) - Kraft Heinz Co KHC.O reported weak sales on Thursday, prompting the maker of packaged foods to write down the value of several business units by more than $1 billion and drop its full-year forecast as it struggles to lure back customers.

Shares fell to a record low as the Chicago-based company marked a 12th straight quarter of lackluster sales.

Kraft Heinz, which counts billionaire Warren Buffett as its largest investor, has been battered by competition from private-label brands, changing consumer tastes and lower investment in its brands due to heavy cost-cutting under leaders installed by Brazilian private equity firm 3G Capital.

The earnings report, delayed by an internal investigation into accounting practices at Kraft Heinz’s procurement team, underscored these issues and pushed shares down by more than 15%.

“Some may say that it’s not a disaster and thus better than feared – we’re not yet in that camp,” J.P.Morgan analyst Ken Goldman said.

Kraft Heinz’s struggles have rocked other major consumer goods companies this year, highlighting the industry’s struggle to cut costs without gutting marketing budgets amid soaring input and transportation costs.

“On the whole, we are dissatisfied with our financial performance year-to-date,” said Chief Financial Officer David Knopf, a 3G Capital partner who was named to the role in 2017 when he was 29 years old. Knopf called Kraft Heinz’s earnings decline “simply unacceptable” and said sales were held back as U.S. and Canadian retailers cut inventory.

FILE PHOTO: Shareholders shop for discounted products at the Kraft Heinz booth at the annual Berkshire Hathaway shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan/File Photo

Retailers from Walmart Inc WMT.N and Kroger Co KR.N to Amazon.com AMZN.O have ramped up investment in store-brand products in recent years, eating into sales at major packaged goods companies and forcing them to revamp products.

Warren Buffett - who teamed up in 2015 with 3G Capital to orchestrate the merger of Kraft Foods and Heinz Co - said in February that pressure from retailers' store brand products had changed Kraft Heinz's ability to price, adding that Costco Wholesale Corp's COST.O Kirkland brand outsells all Kraft Heinz products. Buffett said at the time that his Berkshire Hathaway Inc BRKa.N had overpaid in the deal.

‘SIMPLY UNACCEPTABLE’

3G, Kraft Heinz’s second-biggest shareholder, has used its so-called zero-based budgeting cost-strategy successfully at holdings including Heinz and Anheuser-Busch. The controversial budgeting tool requires managers to justify their expenses annually from scratch, rather than use the prior year as a guide or pursue cost savings on an ongoing basis.

But this approach resulted in smaller marketing budgets for key brands like Oscar Mayer bacon and the loss of brand managers and market share, according to former Kraft Heinz marketing employees.

Kraft Heinz needs to pivot from cost-cutting and instead focus on efficiency and a stronger balance sheet, the company's new CEO Miguel Patricio said on a call to discuss earnings. Patricio, a 30-year marketing veteran from Anheuser-Busch InBev ABI.BR, was named to the role in April. "Setting short-term targets publicly won't be productive as we set and work to deliver against our strategic directions and priorities."

Kraft Heinz said it was withdrawing its previously announced full-year outlook of adjusted earnings before interest, tax, depreciation and amortization between $6.3 billion and $6.5 billion. The company also said net income halved in the first six months of the year.

The company took a charge of about $744 million on its U.S. refrigerated, Latin American exports and Brazil units among others, blaming lower five-year operating forecasts. It also booked an impairment charge of about $474 million in the second quarter to write down the value of six brands, including Velveeta and Cool Whip. The impairment charges are preliminary and subject to finalization of control procedures, it said.

This marks Kraft Heinz’s second major writedown since Feb. 21, when the company knocked $15.4 billion off the value of its Kraft and Oscar Mayer brands, posted a surprise quarterly loss, and disclosed a U.S. Security and Exchange Commission investigation into its accounting practices.

After an internal review, Kraft Heinz said in May it had increased the initial brand writedown by about $13 million due to misstatements in reports for 2016, 2017 and the first nine months of 2018. The U.S. Attorney’s Office for the Northern District of Illinois is working with the Securities and Exchange Commission to investigate this matter.

Net income attributable to the company’s shareholders fell more than 51% to $854 million, or 70 cents per share. Excluding items, the Chicago-based company earned $1.44 per share. Kraft Heinz said net sales fell about 5% to $12.37 billion. The company, whose shares have lost a third of their value since February, said it expects better second-half sales and earnings growth.