Kellogg’s has recorded a 5.8% increase in its second-quarter revenue as it benefits from the acquisition of Rxbar maker Chicago Bar Company.
The company – which owns brands such as Gardenburger, Eggo and Cheez-It – also profited from growth in emerging markets, recording total revenues of $3.36 billion. Net income for the quarter surged by 111.6% to $599 million, due to lower restructuring charges.
Within North America, Kellogg’s largest unit, net sales shrank in both the company’s US snacks unit and US morning foods division. It said that while cereal consumption declines moderated, the firm made progress toward stabilising key health brands, by emphasising their wellness attributes.
Kellogg’s CEO Steve Cahillane
In Europe, net sales were up thanks to the strong performance of Pringles crisps. Meanwhile, in a quarter in which the company announced its exit from Venezuela, net sales increased in Latin America, partly thanks to “sustained momentum in Mexico”.
The company said that around the world its key brands are responding positively to increased advertising and promotion investment.
Net sales growth in emerging markets accelerated, both on a reported and organic basis, with the consolidation of Multipro in Nigeria. Kellogg’s said the move “significantly increases” the importance of emerging markets within the company’s total portfolio.
Kellogg’s CEO Steve Cahillane said: “We’re pleased to report another quarter in which we delivered improving top-line performance and strong earnings growth, even after a significant boost in brand investment.
“We’ve strengthened our portfolio with acquisitions and expanded emerging markets presence, and we’ve reinvigorated our biggest brands. This is starting to show up in our net sales and our in-market performance, and puts us in a position to raise our full-year guidance. We’re still in the early days of deploy for growth, but we like our progress so far in 2018.”
© FoodBev Media Ltd 2019
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