Kellogg sees Q3 results boosted by snacks, reaffirms profit outlook

Kellogg Company has posted a 5.6% rise in reported net sales for its third quarter, driven by demand for its snacks and the performance of its emerging markets business.

The company says that it now expects full-year organic net sales growth of 2-3% – an upgrade on its previous projection of 0-1% growth. However, Kellogg has reaffirmed its guidance for operating profit, expecting the improved outlook for net sales to be offset by higher costs.

The snack maker posted Q3 reported net sales of $3.62 billion, while reported operating profit increased 9.1% in the quarter to $447 million.

While navigating global supply challenges, including shortages and high cost inflation, Kellogg saw particularly strong momentum in its emerging markets during the quarter.

In North America, pricing actions helped to offset volume declines that were in part related to supply disruptions, and third-quarter reported net sales were roughly flat.

Kellogg’s Europe business grew its reported net sales by 14% in Q3, driven by strong volume and price/mix growth.

In Latin America, Kellogg saw a 7% increase in reported net sales – with growth driven by Brazil, snacks and favourable currency translation. However, reported operating profit fell by 7% year-on-year, reflecting high costs and the lapping of “exceptional growth” in the year-ago quarter.

Kellogg Asia Pacific, Middle East and Africa saw its Q3 reported net sales increase by 17% despite adverse currency translation. This rise was led by growth in Africa, along with sustained cereal sales growth in Australia and Asia.

“I’m incredibly proud of how our organisation has executed through an extremely difficult operating environment, marked by economy-wide bottlenecks and shortages and high cost inflation,” said Steve Cahillane, Kellogg Company’s chairman and CEO.

He continued: “These business conditions do not get any easier in the fourth quarter, especially with the added challenge of a current labour disruption. However, our underlying business momentum remains strong, particularly for our biggest snacking and frozen foods brands, and for our businesses in emerging markets.

“And we will continue to navigate through the various supply challenges, with an eye to sustaining balanced financial growth over time.”