Vending

Kellogg reports stronger than expected Q2 2021 results

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August 5, 2021

The Kellogg Co. announced stronger-than-expected results for the second quarter ending July 3, 2021 and affirmed its full-year financial guidance, according to a press release.

Kellogg's net sales rose 2.6% from $3.46 billion in Q2, 2020 to $3.55 billion in Q2, 2021, while organic net sales fell 0.4% from $3.46 billion to $3.45 billion.

The company's operating profit dipped 0.4% from $506 million to $504 million in the comparative quarters.

Diluted earnings per share rose 8.8% from $1.02 to $1.11 in the comparative quarters, while adjusted diluted earnings per share fell 8.1% from $1.24 to $1.14.

Through the first six months of the year, reported net sales increased 4%, driven by foreign currency translation and 2% growth on an organic basis, which excludes the impact of currency.

"Our second quarter results again highlighted the resilience and determination of our organization as well as the effectiveness of our Deploy for Growth strategy and reshaped portfolio," Steve Cahillane, chairman and chief executive officer, said in the press release. "On a 2-year basis, taking into account the lapping of an unusual 2020, we continued to deliver a balance of strong top-line growth, consumption growth, profitability and cash flow generation."

The $3.55 billion in quarterly revenue beat analyst expectations by $120 million, while the non-GAAP EPS of $1.14 beat expectations by 11 cents and the GAAP EPS of $1.11 beat expectations by 9 cents, according to Seeking Alpha.

Shares traded today at $63.04 against a 52-week range of $56.61-$71.65.

Kellogg North America's reported net sales in the second quarter decreased by approximately 7%, despite modestly favorable currency translation. On an organic basis, net sales decreased by 8%, as it lapped last year's outsized growth at the start of the pandemic. Many key brands sustained strong consumption growth momentum on a 2-year compound annual growth basis, and away-from-home channels continued to recover from last year's pandemic-driven decline. Kellogg North America's reported operating profit declined 22% versus the exceptional year-ago results. On an adjusted and currency-neutral adjusted basis, operating profit decreased by 20% and 21%, respectively.

Kellogg Europe's second quarter reported net sales increased 13% driven by favorable currency translation and organic-basis growth of 3%, which was led by snacks in continental Europe and Russia.

Kellogg Latin America's second quarter reported net sales increased 19%, on favorable currency translation and 9% organic growth, featuring broad-based growth across the region, and led by snacks.

Kellogg Asia Pacific, Middle East and Africa's second quarter reported net sales increased by 24%, as slightly favorable foreign currency translation augmented 23% organic-basis growth.

The company's organic net sales growth is now expected to be 0-1% in 2021, an increase from previous guidance for flat net sales, reflecting recent momentum in the business, and despite lapping last year's exceptional growth. This implies a 2-year compound annual growth rate of almost 3%.