Kellogg Company has reported 8% organic growth in sales year-on-year, after the firm benefitted from a March spike in demand due to consumer stockpiling.
The company estimated that slightly more than half of its Q1 organic growth was attributable to higher consumer demand for packaged goods amid the implementation of stay-at-home guidelines and mandates around the world.
Reported net sales, which include the impact of divestiture and currency, fell by 3.1% year-on-year to $3.41 billion but remained ahead of analysts’ predictions.
This decrease, says Kellogg, reflects the subtraction of results from the company’s cookies, fruit snacks, pie crusts, and ice cream cone businesses following their divestiture in late-July 2019.
Reported operating profit in Q1 increased by approximately 21% year-on-year, aided by a favourable swing in mark-to-market adjustments and lower business and portfolio realignment charges.
On an organic basis, Kellogg Asia Pacific, Middle East and Africa reported the strongest sales increase (13%). This was followed by Kellogg Latin America (11%) – although a substantially lower reported net sales increase was recorded for this market (1%), owing to ‘significant’ negative currency translation.
In Europe and North America, Kellogg reported organic growth in sales of 9% and 6% respectively, boosted by the impact of consumer stockpiling.
“I’m extremely proud of how our organisation has risen to the challenge of keeping our employees safe, supplying much-needed food to the marketplace, and giving back to our communities in a time of need,” said Steve Cahillane, Kellogg Company’s chairman and CEO.
“Our ‘deploy for growth’ strategy has continued to improve the underlying performance of our business, and our financial condition is solid as we manage through the crisis.
“In the meantime, we are taking prudent steps to deliver stable and dependable performance now and into the future.”
Kellogg reported a 17.8% drop in year-on-year operating profit in its 2018-19 full-year results, as the firm was impacted by the divestiture of several businesses including the snack brands divested to Ferrero in July.
© FoodBev Media Ltd 2021
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