Vending

Kellogg lifts sales, earnings for Q1 2021, beats analyst expectations

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May 6, 2021

Kellogg reported net sales increased 5% from $3.4 billion in Q1 2020 to $3.58 billion for the quarter ending April 3, 2021, as elevated demand for packaged foods consumed at home and favorable currency translation more than offset continuing softness in away-from-home channels and on-the-go occasions, according to an earnings report.

Net income rose from $350 million to $371 million, while earnings per share rose 5.9% from $1.01 to $1.07 on both a basic and diluted basis. Adjusted diluted EPS rose 12.1% from 99 cents to $1.11 during the period, while currency neutral diluted EPS rose 8.1% from 99 cents to $1.07.

Strong net sales growth was broad-based across regions and global categories despite lapping exceptional year-ago performance.

On an organic basis, which excludes the impact of currency, the company's net sales increased by 4%.

The $3.58 billion in revenue surpassed analyst estimates by 5.38%, according to Zacks, while the $1.11 adjusted diluted EPS beat expectations of 95 cents.

Shares traded at $67.50 today against a 52-week range of $56.61-$72.88.

"Amidst continued difficult circumstances, our organization executed exceptionally well in the first quarter and delivered very good results, both financially and in-market," Steve Cahillane, chairman and chief executive officer, said in a press release. "The quarter featured continued momentum in major brands and categories, accelerated growth in emerging markets, and effective management of cost pressures through productivity and revenue growth management."

Kellogg North America's reported net sales in the first quarter increased by approximately 2%, aided modestly by favorable currency translation. On an organic basis, net sales increased by 1% driven by continued elevation of demand for packaged foods consumed at home and by favorable timing of shipments.

Kellogg Europe's reported net sales increased 10% driven by favorable currency translation and organic basis growth of 3%. Pringles sustained its strong momentum across the region, and while cereal sales lapped last year's pandemic-related surge, they remained elevated relative to pre-pandemic levels.

Kellogg Latin America's reported net sales increased 4% despite negative currency translation. On an organic basis, net sales increased 10%, as cereal demand across the region remained elevated while snacks' growth accelerated, especially in Brazil where local production and a new distributor are continuing to benefit Pringles.

Kellogg Asia Pacific, Middle East and Africa reported net sales increased by 14%, driven by growth momentum across the region and across cereal, snacks and noodles and other. On an organic basis, net sales increased by 15

The company raised its full-year financial guidance on the strength of its first quarter results. Organic net sales growth is now expected to finish 2021 approximately flat year on year, up from previous guidance of a decline of approximately 1%. Currency-neutral adjusted operating profit growth is now projected to decline approximately 1% - 2% year on year, an improvement from previous guidance of a decline of approximately 2%. Currency-neutral adjusted earnings per share for the full year is now estimated to increase by approximately 1% to negative 2% year on year, an improvement from previous guidance 1%.

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