On Thursday, Kellogg Co. (K.N) anticipated a smaller annual profit decrease and boosted the lower end of its sales prediction due to persistent price rises and solid cereal and snack demand.
After beating first-quarter revenue and profit projections, Michigan-based Corn Flakes producer shares increased slightly in premarket trade.
Like other global packaged food companies, Kellogg has used its brand strength to slowly boost product prices over the past year to offset rising ingredient costs during a cost-of-living crisis.
Demand, especially for Kellogg’s more expensive cereals, has remained steady as buyers refuse to switch to lower brands and continue to spend more for their favorite snacks. PepsiCo Inc (PEP.O) and Hershey Co (HSY.N) also raised their yearly predictions recently due to pricing hikes, like Pringles.
Organic volumes fell 1.9% in the first quarter, while prices jumped 15.6%. Fourth-quarter volumes rose 0.6%.
Kellogg now forecasts its full-year adjusted profit per share to fall 1% to 3%, down from 2% to 4%.
Corn Flakes expects organic net sales growth of 6% to 7% in 2023, up from 5% to 7%.
Refinitiv IBES data shows first-quarter net sales grew 10.4% to $4.05 billion, exceeding analysts’ $3.95 billion expectation.
Kellogg earned $1.10 per share excluding items, above projections of 99 cents.
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