Vending

Kellogg lifts Q2 2023 results driven by snack sales

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August 3, 2023

Kellogg improved its Q2 2023 results driven by sustained momentum in snacks, according to an earnings report.

Highlights include:

• Net sales increased by 5% from $3.86 billion in Q2 2023 to $4.04 billion for the quarter ending July 1, 2023, reflecting positive price/mix and sustained momentum in snacks that more than offset the impacts of price elasticity and adverse currency translation.
• On an organic basis, which excludes the impact of currency, the company's net sales increased by 7%.
• Net income rose from $326 million to $362 million in the comparative quarters.
• Basic EPS rose from 96 cents to $1.04 while diluted EPS rose from 95 cents to $1.03. Reported earnings per share in the second quarter increased by 8% year on year, 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 company's pending separation into two companies.
• Adjusted diluted EPS increased 5% from $1.18 to $1.25 while currency neutral adjusted diluted EPS rose from $1.18 to $1.24.
• Kellogg North America net sales increased by 3% driven by price/mix growth that more than offset the impact of price elasticity as well as the lapping of prior-year trade inventory replenishment.
• Kellogg Europe net sales increased 12% as price/mix growth and momentum in snacks more than offset the impact of price elasticity.
• Kellogg Latin America net sales increased 17% due to price/mix growth and favorable currency translation.
• Kellogg Asia Pacific, Middle East and Africa net sales decreased by 3% as adverse currency translation more than offset price/mix growth.

Shares traded today at $66.12 against a 52-week range of $63.74 to $77.17.

The $4.04 billion in quarterly revenue missed analyst expectations by $20 million while the non-GAAP EPS of $1.24 beat expectations by 13 cents, according to Seeking Alpha.

"Our second quarter featured continued strength of our brands, execution and results," Steve Cahillane, chairman and CEO, said in the press release. "Not only do we continue to grow net sales organically above our long-term targets — we are also seeing the results of our efforts to recover profit margins."

The company raised its guidance for organic-basis net sales growth to approximately 7%, from its prior guidance of 6% to 7%.

It also raised its guidance for adjusted-basis earnings per share decline from prior guidance of an approximately 1% to 3% decline to 1% to 2% on a currency-neutral basis.