Kellogg Company

Kellogg Company delivered mixed results in the quarter, with revenues below expectations but surpassed the Wall Street consensus regarding earnings. On an organic basis, net sales increased by 7% in the second quarter. On an adjusted basis, operating profit increased by 14%. This growth was in addition to the 10% currency-neutral growth of the previous year and included the earlier-than-anticipated improvement of the gross profit margin. With this operating profit result, Kellogg is slightly above its previous full-year forecast. Market growth rates for the snacks category remained strong and may have even increased somewhat from the previous quarter. Pringles has outperformed the salty snack category in key areas where growth is in the high teens or greater. They kept expanding their market share in Australia, Japan, Korea, and Thailand throughout the second quarter. EMEA Cereal is also maintaining a strong growth pace. Net sales of Kellogg’s Noodles also increased significantly in South Africa and Egypt. Furthermore, they expanded into frozen food. As Kellogg’s supply has increased, Eggo’s market share losses have been moderated as consumption growth has improved. Additionally, Morningstar Farms increased its market share throughout the quarter as its supply also improved.