Kellogg’s profit down on higher costs
Higher costs have dented US cereal giant Kellogg’s first-quarter earnings, which fell 12% in the three month period.
The Cornflakes maker said that profit in the period to 2 April fell to US$366 million, down from $418m last year.
The group said that earnings were hit by higher costs, with gross margin dippping to 40.8%, down from 42.9%. The cost of goods sold rose 9% year-on-year.
Nevertheless, Kellogg insisted that it was pleased with its sales performance and raised its full-year revenue guidance to 4%, from its February guidance range of 3-4%.
Sales in the first quarter climbed 5% to $3.5bn, with currency exchange contributing 2% to the gain. In North America sales were up 4%, while international revenues rose 8%, the company revealed. Asia-pacific sales rose 2.2%, supported by a strong Australian dollar.
“Our top-line growth reflects our increased emphasis on innovation, investment in brand building and net price realisation. Our momentum is building, as demonstrated by strong share gains in most of our US categories,” said John Bryant, Kellogg president and chief executive officer.
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