WK Kellogg Co beat Wall Street estimates for quarterly sales as higher product prices offset pressure from slowing demand for the Froot Loops maker's ready-to-eat breakfast items and snacks.
Like other major brands in the packaged food market, the spun-off North American cereal business of Kellanova has been ramping up prices to shield its margins from an inflation-induced slowdown in consumer spending.
Its pricing rose by 6.3% in the reported quarter, driving volumes down 7%.
Kellanova had also posted better-than-expected quarterly sales and profit last week and maintained the 2024 forecast provided in August.
Quarterly Highlights
WK Kellogg reported sales of $707 million (€657.9 million) for the first quarter ended March 30, above analysts' average estimate of $697.8 million (€649.3 million), according to LSEG data.
EBITDA for the quarter increased 13.6% year-on-year on a standalone basis, resulting in an adjusted EBITDA margin of 10.6%.
The Apple Jacks cereal maker also reaffirmed its annual adjusted net sales growth range forecast at down 1% to up 1%.
It reported a net income of $33 million (€30.7 million), or 37 cents per share, from $24 million (€22.3 million), or 28 cents per share, a year earlier. Analysts were expecting a profit of 38 cents.
“Our strategy is clear, our integrated and engaged team is working end-to-end, and we are pleased with our progress as we continue to execute our strategic priorities. We've started 2024 delivering first quarter financial results in line with our expectations, and we are on track for the year,” said Gary Pilnick, chair and chief executive officer of WK Kellogg Co.
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News by Reuters, additional reporting by ESM.
