© Reuters Kellogg (K) tops earnings estimates following North American cereal rebound
Resilient demand and recovering profit margins helped Kellogg (NYSE:) post a top and bottom line beat when it reported results for its first quarter before the open on Thursday.
The packaged food maker Q1 EPS of $1.10, $0.10 better than the analyst estimate of $1, with revenue for the quarter coming in at $4.17 billion versus the consensus estimate of $3.96B.
Kellogg’s first quarter net sales increased by 10% YoY, which it said reflects positive price/mix, and was led by a sustained momentum in snacks and noodles, as well as a continued rebound in North American cereal. However, operating profit decreased by 15%.
Kellogg’s shares are down more than 3% at the time of writing on Thursday.
“We’re very pleased to get off to such a strong start to the year,” said Steve Cahillane, Kellogg Company’s Chairman and Chief Executive Officer. “We continue to grow net sales organically above our long-term targets, and this growth spans across our Regions and our category groups. We also continue to make progress toward recovering our profit margins.”
The company raised its full-year guidance, with net sales growth now expected to be between +6% and +7%, up from the previous expectation of +5% to +7%. Operating profit growth is expected from +8% to +10%, up from +7% to +9%, while the company now sees its adjusted EPS declining by 1% to 3%, up from the prior expected decline of 2% to 4%.
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