K - Kellogg tracks higher after boosting guidance

2023-08-03 09:58:31 ET

Kellogg Company ( NYSE: K ) reported revenue rose 4.6% in Q2 to $4.04B to slightly miss the consensus estimate. Organic sales were up 7.1% during the quarter as positive price/mix, andsustained momentum in snacks helped to offset theimpactsof price elasticity andadversecurrency translation.

Reported earnings per share in the second quarter increased by 8% Y/Y, driven by higher net sales, favorable net mark-to-market and one-time charges, and a lower effective tax rate that more than offset incremental up-front costs related to the pending separation. On an adjusted basis, which excludes one-time items, earnings per share increased 6%, and excluding currency translation, adjusted earnings per share increased by 5% to sail past the consensus expectation.

The food company said operating profit growth was driven by topline momentum and a gross margin that continued to recover sooner than anticipated, aided by productivity, revenue growth management, and improving supply and service levels. The performance prompted management to again raise its full year outlook. Kellogg ( K ) expects organic-basis net sales growth to be up approximately 7% vs. prior guidance of +6 to +7%. The guidance boost was said to reflect the strength of the first half results. Kellogg ( K ) also noted that it continues to make progress toward the spin-off of its North America cereal business, which is expected to be completed during the fourth quarter.

Shares of Kellogg ( K ) rose 0.41% in early trading on Thursday to $66.91 following the earnings topper.

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