Kellogg lifts annual profit outlook on higher prices
2023.08.03 08:43
© Reuters. FILE PHOTO: Kellogg’s cold cereal products are pictured in a market in New York, U.S., June 21, 2022. REUTERS/Mike Segar/File Photo
(Reuters) -Kellogg Co on Thursday forecast a smaller drop in annual profit than it had previously expected, as multiple price hikes for its breakfast snacks and cereals helped the Corn Flakes maker strengthen its margins.
The packaged food giant, like several other industry players such as PepsiCo (NASDAQ:), Conagra Brands (NYSE:) and Hershey, has been consistently raising prices over the past year to safeguard margins from cost pressures tied to raw materials like sugar.
The company’s strong forecast mirrors comments from packaged food peer Mondelez (NASDAQ:) International which raised its full-year forecasts last week on the back of higher prices and robust demand.
Kellogg (NYSE:) reported an adjusted profit of $1.25 per share in the quarter ended July 1, surpassing market expectations of $1.11.
The Pringles maker said it expected 2023 adjusted profit per share to fall between 1% and 2%, compared with its prior forecast for a decline of 1% to 3%.
However, its second-quarter sales of $4.04 billion were below analysts’ forecast of $4.07 billion, signaling tapering demand for its cereals and snacks following multiple rounds of price hikes.
Pricing rose by 14.7% in the reported quarter, driving organic volumes down 7.6%.
