Kellanova topped Wall Street estimates for quarterly sales and profit, as demand for its ready-to-eat pop-tarts and other convenience foods held steady in the face of increased prices.
The Pringles maker, like other global packaged food makers, has been using its brand power to steadily raise product prices to protect margins from the impact of higher costs.
The company, formerly known as Kellogg, has seen no major pushback for its pricier products as consumers refrained from trading down to cheaper alternatives and were still willing to pay more for their favourite snack brands.
The company reported net sales of $3.2 billion in the fourth quarter. Analysts were expecting sales of $3.08 billion, according to LSEG data.
Analysts said the results were 'better than feared' after the company also maintained its 2024 outlook provided in August.
Early in October, the company completed the spin-off of its North American cereal business into a new standalone entity called WK Kellogg and renamed itself to Kellanova, in a move to sharpen focus on each division.
'Generally Positive' Results
"(We) see this quarter's results as generally positive for Kellanova despite the fact that Q4 earnings were likely to be slightly messy given dynamics around the spin of the NA cereal business," RBC Capital Markets analyst Nik Modi said.
The volume declines were less than expected, Modi added.
The Rice Krispies maker also announced restructuring plans for its North American frozen supply chain network and European cereal supply chain network to drive productivity.
It reported an adjusted profit of 78 cents per share for the quarter, surpassing analysts' expectations of 74 cents per share.