US – Cereal and snacks giant Kellogg has posted a 9% increase in reported net revenue for its third quarter, driven by demand for its snacks, noodles, and cereal.

During the quarter, Kellogg said it navigated through global supply challenges and worked well toward battling cost pressure through productivity and revenue growth management efforts.

The company posted Q3 reported net sales of US$3.95 billion exceeding expectations of US$3.78b in revenue., while reported operating profit fell by nearly 18% in the quarter to US$368 million and Adjusted operating profit dipped by 0.2% and stood at US$449m.

Whereas the overall average selling prices rose 15.7% in the quarter, Kellogg’s volumes fell by 2.3%. The company is confident that it can maintain and grow its share across categories in the fourth quarter.

Kellogg Company’s chairman and CEO, Steve Cahillane, said: “We’re pleased to report another quarter of better-than-expected financial performance and an increase to our outlook for the year”.

 “This required navigating effectively through global supply challenges and working to offset cost pressures with productivity and revenue growth management, all while sustaining momentum in snacks and emerging markets, and continuing to recover inventory and share in North America cereal”.

Sales in the North American segment amounted to US$2.34 billion, increasing 13.7% year over year backed by favorable price/mix and better volumes.

Continued momentum in snacks and growth in North American cereal were upsides, enabling the unit to achieve net sales growth of 14% on an organic basis.

The organic net sales of the European segment jumped 3% in the quarter, however, revenues which totaled US$562 million, went down 10.9% year over year due to unfavorable currency movements and the impact of suspending shipments to Russia.

The Latin America organic sales climbed 14% as well as revenues in that totaled US$283 million, an up of 12.6% year over year, backed by a solid price/mix and net sales momentum in snacks and cereal. Unfavorable foreign currency rates were a concern.

Meanwhile, Kellogg Asia Pacific, Middle East, and Africa posted an increase in net sales of 12% for Q3, having revenues rise of 12.2% year over year totaling US$767 million.

As much as unfavorable foreign currency rates were a concern for the latter segment, the increase was driven by a favorable price/mix and sales momentum in snacks, noodles, and others, as well as cereal.

Considering its better-than-expected financial performance in Q3, Kellog raised its 2022 guidance, expecting the organic net sales growth in Full Year 2022 to be up 10% from 7 to 8%, Adjusted operating profit to rise nearly 6% at cc, up from the previous view of 4-5%.

The company also anticipates a profit per share rise of more than 3% on a currency-neutral basis, compared with its previous estimate of 2% growth.

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