Kellogg Co. said higher prices helped it maintain its profit outlook for the year.
Photo: GABBY JONES for The Wall Street Journal
Kellogg Co. K 3.88% posted a 15% increase in first-quarter earnings, while warning of worsening cost inflation and disruptions from the war in Ukraine.
The maker of Rice Krispies and Cheez-Its said higher prices and sales momentum allowed it to maintain its profit view for the year, despite the additional challenges. It expects sales to rise slightly more than previously expected.
Kellogg said first-quarter profit rose due to higher prices and steady sales growth for its snack brands, as well as for its noodle products in Africa. The growth also came despite inventory challenges stemming from striking factory workers and a plant fire last year.
The food giant said earlier this year that some of its iconic cereal brands had lost ground in U.S. grocery stores after production capabilities were stunted by a plant worker strike over contract negotiations that lasted from October to December. The company’s network was also strained by a fire at a cereal plant in Memphis last summer.
On Thursday, Kellogg said it had restored its North American cereal inventory faster than anticipated.
For the period ended April 2, Kellogg reported profit of $424 million, or $1.23 a share, versus $371 million, or $1.07, a year earlier. Analysts polled by FactSet recently forecast earnings of 92 cents.
Sales rose 2.4% to $3.67 billion, beating analyst estimates of $3.59 billion.
Kellogg now expects organic sales, which strips out impacts from currency, acquisitions and divestitures, to rise 4% compared with its prior view of 3%.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
