Kellogg’s has seen its net sales fall by 2.5% to $3.19 billion in the second quarter of the year, beating analysts’ estimates of $3.16 billion.
The cereal giant recorded an increase in income of 0.7%, up to $282 million, as it carries out a series of cost-cutting measures.
The company’s US snacks business, posted flat net sales but the company highlighted the momentum of Rice Crispies Treats. Its US speciality channels segment grew, driven by innovation and expansion in core and emerging channels.
In Europe, there was decrease in net sales, which was put down to lost activity due to ‘customer negotiations related to pricing actions on Pringles’.
Kellogg CEO John Bryant said: “Our second quarter results keep us on track to deliver on our full-year financial targets, with sequential improvement in net sales performance and continued profit-margin expansion.
“More importantly, we continued to make progress toward the transformation of our company. For instance, during the quarter we made strong progress on our transition out of Direct Store Delivery in US snacks, an enormously complex initiative that the team has executed exceptionally well. We remain committed to returning to top-line growth, as outlined in our 2020 Growth Plan.”
For 2017 as a whole, the company forecasts a decline in net sales of around 3%. However, it believes operating profit will grow between 7% and 9% due to productivity savings.
Concluded Bryant: “We are encouraged that we remain on track to deliver on our 2017 currency-neutral comparable profit and earnings outlook, even amidst challenging industry conditions.
“However, we are equally pleased that we are taking the right actions to return our business to top-line growth, which is a priority for us.”
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