(Bloomberg) -- Kellogg Co. shares fell after the company posted sales that just missed projections last quarter, dragged down by continuing challenges with breakfast foods.
- The packaged-food giant reported revenue of $3.52 billion in the first quarter, shy of the $3.54 billion analysts had estimated. It also announced that finance chief Fareed Khan will leave on July 1 and be replaced by Amit Banati, currently president of of its Asia Pacific, Africa and Middle East division.
Key Insights
- Cereal sales have been on the decline for years, as the breakfast-food category has been getting increasingly competitive with on-the-go bars and restaurants making a bigger play for consumers. In North America, cereal net sales slipped 4 percent when excluding the impact of currency, the company said, citing issues related to the timing of shipments.
- As cereal loses its luster with changing American consumers, the company has been doubling down on salty snack development, including launching single-serve packs of products like Pringles and Cheez-It crackers. Still, snack sales in its home market were flat in the quarter, suggesting more work is needed ahead.
- The Frosted Flakes maker also faced unexpected challenges in the quarter, including higher input and transportation costs, plus a recall of its RXBAR protein bars.
Market Reaction
- Kellogg shares fell as much as 4.9 percent to $56.47 in New York, the biggest intraday drop since Feb. 7. The stock had gained 4 percent this year through Wednesday's close, trailing the advance in the S&P 500 Index.
Get More
- For details of the results, click here.
- For the company statement, click here.
To contact the reporter on this story: Deena Shanker in New York at dshanker@bloomberg.net
To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson, Craig Giammona
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