Kellogg Company has reported 4.5% growth in organic net sales for its third quarter and raised its full-year financial guidance for the second time this year.
In Kellogg’s second quarter, elevated at-home demand as a result of the coronavirus pandemic boosted the company’s sales, and this trend continued – at a more moderate level – in Q3.
Reported operating profit in Q3 increased by approximately 56% year-on-year to $411 million primarily due to substantially lower one-time charges.
On an organic basis, Kellogg Latin America saw the strongest growth in net sales, which were up 13% on the same quarter last year as demand for the company’s cereals remained high and demand for snacks improved. However, reported net sales fell 3% due to negative currency translation, as currencies in the region declined ‘sharply’ versus the US dollar.
Kellogg Asia Pacific, Middle East and Africa reported a nearly 11% year-on-year increase in organic net sales. The unit saw broad-based growth across the cereal, snack, and noodle categories, as well as across different markets.
In North America, Kellogg recorded an increase in organic sales of approximately 3% with growth in cereal, snacks and frozen foods, and in the US, the company claims to have gained market share in five of its six primary categories.
On an organic basis, net sales in Europe increased by approximately 1%, with growth in cereal and Pringles partly offset by a decline in portable wholesome snacks, as the pandemic reduced demand for on-the-go formats.
Reported net sales, which include the impact of divestiture and currency, were up 1.7% year-on-year in Q3 to $3.43 billion. However, for the nine months ended 26 September, these declined by 0.5% largely due to the impact of a July 2019 divestiture.
“Amidst an uncertain business environment, our strong planning and execution drove better-than-expected financial results and solid in-market performance across all four of our regions in the third quarter,” said Steve Cahillane, Kellogg Company’s chairman and CEO.
“Accordingly, we are raising our full-year outlook for all key financial guidance metrics, even as we increase investment for the future.”
Kellogg has forecast full-year organic net sales to rise by about 6%, revising previous guidance of an approximate 5% increase.
© FoodBev Media Ltd 2020