Kellogg suffers fall in sales and profit

By Laurence Gibbons

- Last updated on GMT

Kellogg has suffered a fall in sales and profits
Kellogg has suffered a fall in sales and profits

Related tags Net sales North america

Kellogg, the US cereals company, has suffered a fall in net sales and reported operating profit for the second quarter to July 4 2015.

The Michigan-based cereal and snack manufacturer blamed its 11.6% decline in operating profit to $412M (£264M) on the impact of up-front costs in its Project K efficiency and effectiveness programme, a remeasurement of its Venezuelan business and foreign-currency exchange.

 Its sales fell by 5.1% to $3.5bn (£2.24bn) largely as a result of currency translation, the firm claimed.

Kellogg’s chairman and ceo John Bryant said earnings were in-line with the firm’s expectations.

‘Pleased with the results’

“We were pleased that results in the second quarter were as we expected,”​ he said.

“We’ve seen good growth in the Asian and Latin American businesses, growth in the European snacks business, and improving trends in the North American business.

“After a difficult 2014, we continue to build momentum in 2015 and are on-track to achieve our long-term growth targets for currency-neutral comparable sales and operating profit in 2016.”

North American net sales were $2.3bn (£1.47bn) in the second quarter, a decrease of 2.8%. Currency-neutral comparable net sales decreased by 1.8%.

Reported operating profit in North America decreased by 2.5% because of lower sales, higher distribution costs, costs associated with the timing of production, and the resetting of incentive compensation.

Europe

International reported net sales decreased by 15.3% in Europe in the quarter. Currency-neutral comparable net sales decreased by 2.5%. The Pringles business posted good rates of growth.

In Latin America, reported net sales increased by 2.5%; currency-neutral comparable net sales increased by 14.5%, including good rates of growth across much of the region.

Reported net sales in Asia Pacific decreased by 5.2%; currency-neutral comparable net sales increased by 6.8% as a result of strong growth in the Asian businesses.

Related topics Bakery

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