Kellogg's Snacks Help Results, but Cereal Remains a Challenge
30 October 2019 - 12:10AM
Dow Jones News
By Micah Maidenberg
Kellogg Co. was helped in the third quarter by its snacks
business, but the maker of Rice Krispies again struggled to lift
sales of its portfolio of cereals.
Battle Creek, Mich.-based Kellogg reported sales of $3.37
billion for the quarter, slightly more than expectations from
analysts polled by FactSet but down from $3.47 billion a year
earlier. The company said its sale of Keebler cookies and other
brands, a deal that was completed in July, weighed on results
compared with the third quarter last year.
On an organic basis, excluding currency fluctuations, mergers
and asset sales, sales rose 2.4% in the quarter, Kellogg said.
In the U.S. and Canada, the food manufacturer said stronger
demand for snacking products like Pringles and Cheez-It crackers
boosted results. But sales of cereals fell, a decline Kellogg
attributed in part to softness in the category. Snack sales rose 5%
on an organic basis but fell by about the same amount for
cereals.
Long a breakfast staple, cereal has struggled in recent years as
consumers have opted for more protein-heavy meals at the start of
the day and fast-food chains have moved to expand their breakfast
businesses.
The company reported a profit of $247 million, or 72 cents a
share, compared with $380 million, or $1.09 a share, last year.
Adjusted profit fell to $1.05 a share, but exceeded forecasts
from analysts.
Kellogg's costs of goods sold rose about 3% in the quarter.
Selling, general and administrative expense fell 6%.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
October 29, 2019 08:55 ET (12:55 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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