Kellogg Company

Kellogg managed an all-around beat in the latest quarterly result, with a 14% organic net sales growth and better-than-expected profit margins. The company’s top-line growth momentum continued, driven by sustained growth in price and mix, despite significant macro-related headwinds. Kellogg’s focus on productivity initiatives and revenue growth management actions helped protect gross profit dollars and improve gross profit margins. The company’s operating profit showed solid year-on-year growth for the fourth consecutive quarter, and its cash flow and balance sheet remained strong. Kellogg raised its guidance for organic net sales growth, adjusted operating profit growth, and adjusted earnings per share, reflecting the strong performance in Q1. The management is making progress in setting up its spin-off companies, Kellanova and W.K. Kellogg, and is confident in their financial success. Kellogg Company continued to invest in research and development, focusing on innovation and expanding its product portfolio to meet evolving consumer demands. We give Kellogg Company a ‘Hold’ rating with a revised target price.