Kellogg saw a boom from the Covid-19 pandemic as people ate at home more and turned to trusted brands.
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Shares of Kellogg climbed roughly 7% Thursday on a better-than-expected first quarter and an improved outlook for organic sales.
Kellogg (ticker: K) said it earned $368 million, or $1.07 a share, compared with $1.01 a share in the year-ago period. On an adjusted basis, which excludes one-time items, earnings per share were $1.11, or $1.07 on a currency-neutral basis. Revenue increased 5.1% to $3.58 billion. Analysts were looking for EPS of 96 cents on revenue of $3.38 billion.
Organic revenue grew 4.2%; sales were higher across all geographies.
For the full year, Kellogg said it now expects organic net sales to come in flat year-over-year, up from its previous forecast of a 1% decline.
Kellogg, like other packaged food companies, saw a boom from the Covid-19 pandemic, as more people ate at home and turned to trusted brands over private label offerings. That hasn’t always helped the stock, though, given concerns about the sustainability of that momentum as the crisis nears an end.
So investors were likely heartened to hear that organic sales—a key metric for consumer products companies that strips out acquisitions to focus on existing operations—won’t decline despite difficult year-over-year comparisons.
Kellogg stock was up 7.1% to $67.50 in morning trading. The shares have gained 7.2% year to date and are up 6.4% in the past 12 months.
Late last month, Barron’s argued that packaged-food stocks still had more room to run.
Write to Teresa Rivas at [email protected]
