Vending

Kellogg Q4 2020 sales rise but miss analyst projections

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February 11, 2021

Kellogg's fourth quarter 2020 net sales rose 7.5% from $3.22 billion in 2019's fourth quarter to $3.46 billion for quarter ending Jan. 2, 2021, aided by an additional week in the fiscal year, according to an earnings release.

On an organic basis, net sales increased by 2.5% from $3.22 billion to $3.3 billion, year on year, as all four regions posted growth.

Full year reported net sales increased by approximately 1% from $13.57 billion to $13.77 billion, as the absence of results from businesses divested in 2019 and adverse currency translation were more than offset by business momentum, elevated demand for food at home brought on by the COVID-19 pandemic, and a 53rd week in the fiscal year.

Reported diluted earnings per share rose 40.5% from 42 cents in 2019's fourth quarter to 59 cents in 2020, and adjusted diluted EPS declined 5.5% from 91 cents in 2019's fourth quarter to 86 cents in 2020.

The company's $3.46 billion revenue missed analyst expectations by $30 million, according to Seeking Alpha, while its Non-GAAP EPS of 86 cents missed expectations by 2 cents and the 59 cents GAAP EPS missed by 26 cents.

Shares traded at $57.10 today against a 52-week range of $52.19-$70.27.

The company declared a 57 cents per share quarterly dividend payable March 15 for shareholders of record March 2. In addition, the company plans to increase the quarterly dividend to 58 cents a share beginning in the second quarter of 2021.

"We enter 2021 with solid momentum, and I remain confident that Kellogg will emerge from this pandemic a stronger company," Steve Cahillane, Kellogg chairman and CEO, said in the release. "We've enhanced capabilities, reached incremental households, invested in our supply chain, and improved our financial flexibility. We are on sound footing for continued balanced financial delivery."

Kellogg North America's reported operating profit increased by 6%, primarily reflecting an additional week in the fiscal quarter, and partially offset by incremental COVID-related costs and increased advertising and consumer promotion investment.

For the full year, Kellogg North America's reported net sales declined by less than half a percent, primarily due to the absence of results from divested businesses, partially offset by the inclusion of a 53rd week in the fiscal year.

On an organic basis, net sales increased by 5%, featuring growth in cereal, snacks and frozen foods, as elevated at-home demand during the pandemic more than offset declines in away-from-home channels.

Kellogg North America's reported operating profit increased 21% primarily due to lower one-time charges, and the impact of higher net sales, which more than offset incremental COVID-related costs and the absence of results from divested businesses. On an adjusted basis, operating profit increased 3%.

Kellogg Europe's reported operating profit increased by approximately 32%, due to lower one-time charges, the impact of higher net sales, and an extra week in the fiscal quarter, partially offset by incremental COVID-related costs and increased advertising and consumer promotion.

Kellogg Latin America's full year reported operating profit increased 14% as the impact of higher net sales and reduced one-time charges more than offset adverse currency translation.

Kellogg Asia Pacific, Middle East and Africa's reported operating profit increased by approximately 20% in the fourth quarter, aided by lower one-time charges, positive currency translation and an additional week in the fiscal quarter.

The company issued its initial financial guidance for 2021, projecting organic net sales to decrease by approximately 1%, as it compares against unusually strong, COVID related growth in the prior year; this implies a 2-year compound annual growth of about 2.5%.

Adjusted operating profit on a currency-neutral basis is expected to decline by approximately 2%, as it compares against unusually strong, COVID-related growth and a 53rd week in the prior year.

Adjusted earnings per share, on a currency-neutral basis, is expected to increase by approximately 1%.

For an update on how the convenience services industry is affected by the coronavirus pandemic, click here.