By Aaron Back

Kraft Heinz, like its packaged-food peers, got a big sales bump from Covid-19. But its fundamental challenges remain unresolved.

This was underscored Thursday as the company reported strong underlying numbers but took yet another multibillion-dollar write-down of its brands and other intangible assets, resulting in a $1.65 billion net loss for the three months ended June 27. Kraft Heinz shares, which were up about 11% this year before the announcement, fell by around 3% in early trading Thursday.

The stock is a sharply debated one on Wall Street. Bulls will focus on the quarter's 7.4% organic sales growth, which strips out the impact of mergers and currency effects, powered by both strong volumes and price increases. Bears will point to the $2.9 billion of impairment charges in the quarter, including write-downs of Oscar Mayer, Maxwell House and seven other brands. These charges echo Kraft Heinz's massive $15.4 billion of write-downs in February of last year, which also included Oscar Mayer.

In truth, both sets of numbers are largely beside the point. The real issue for the stock, as JPMorgan analyst Ken Goldman puts it, is that Kraft Heinz "has yet to prove it can thrive in a non-Covid-19 world."

Americans are eating more at home and putting less emphasis on healthy diets, naturally leading to higher consumption of products like boxed macaroni and cheese. Once things return to a more normal state, Kraft Heinz will still be left with the task it had before the pandemic: updating its aging brands to retain their appeal to consumers. Oscar Mayer and Maxwell House are clear examples of this, but there are many more in the company's stable, from Jell-O to Capri Sun.

Here there remains cause for concern. In 2019, the last period for which detailed data was available, Kraft Heinz spent only 0.4% of sales on research and development, compared with around 1% at peer companies, according to calculations by Bernstein analyst Alexia Howard. Similarly it spent just 2% of sales on advertising compared with 4% at its rivals, Ms. Howard notes.

The hope is that the coronavirus windfall gives Kraft Heinz ammunition to make the necessary investments. But this is also true of its competitors. Company executives said Thursday that they plan a 40% bump in media spending in the second half of the year, but added that this would be offset with marketing cuts elsewhere. Even if it wasn't being offset, the increase wouldn't be enough to close the gap with rivals.

And while margins have risen during the pandemic, Chief Financial Officer Paulo Basilio warned on a conference call Thursday that they would likely return to around year-ago levels in the current fiscal quarter, driven by higher commodity prices and other cost pressures.

Mr. Basilio stressed that Kraft Heinz remains "in the first year of a multiyear turnaround." Investors should keep that in mind before bidding up the stock any further.

Write to Aaron Back at aaron.back@wsj.com