Kellogg suffers fall in sales and profit
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.
