Vending

Kellogg's lifts Q2 2022 sales, surpasses expectations

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August 4, 2022

Kellogg's sales rose nearly 10% in Q2 2022, as positive price/mix and in-market momentum in snacks, noodles and international cereal sales increased and were complemented by faster-than-expected recovery in North America cereal, more than offsetting the impacts of price elasticity and adverse currency translation. Highlights include:

• Net sales rose 9.7% from $3.55 billion in Q2 2021 to $3.86 billion in the quarter ending July 2, 2022.
• Net income declined from $385 million to $326 million in the comparative quarters.
• Diluted earnings per share fell 14.4% from $1.11 to 95 cents, while basic EPS fell from $1.12 to 96 cents and adjusted EPS rose 3.5% from $1.14 to $1.18.
• Kellogg North America's reported net sales increased by 12% year on year, driven by price/mix growth from revenue growth management actions, as well as volume growth related to in-market momentum in snacks and a faster-than-expected recovery in shipments and share in North America cereal.
• Kellogg Europe's reported net sales declined 3% year on year as significantly adverse foreign currency translation more than offset price/mix and net sales momentum in snacks and cereal.
• Kellogg Latin America's net sales increased 8% year on year, as price/mix and net sales momentum in snacks more than offset the impact of adverse foreign currency translation.
• Kellogg Asia Pacific, Middle East and Africa's net sales increased by 11% year on year, as price/mix and net sales momentum in snacks, noodles and cereal more than offset the impact of significantly adverse foreign currency translation.

Shares traded today at $74.41 against a 52-week range of $59.54-$76.45.

The $3.86 billion in quarterly revenue beat analyst expectations by $220 million, while the non-GAAP EPS of $1.18 beat expectations by 13 cents, according to Seeking Alpha.

"We sustained notably strong growth momentum in snacks and emerging markets, while accelerating the recovery of supply and category share in our North America cereal business, all while leveraging productivity initiatives and revenue growth management to mitigate the impact of decades-high input cost inflation," Steve Cahillane, chairman and CEO, said in the press release.

The company raised its guidance for organic-basis net sales growth to 7%-8% from its prior guidance of approximately 4%.

The company also raised its guidance for adjusted-basis earnings per share growth to approximately 2% on a currency neutral basis from prior guidance of 1%-2%.