This post was originally published on this site
https://i-invdn-com.investing.com/trkd-images/LYNXMPEJ430HF_L.jpg
Shares of the Michigan-based company rose marginally in premarket trading after the Corn Flakes maker beat market expectations for first-quarter revenue and profit.
Kellogg (NYSE:K), like other global packaged food makers, has been using its brand power to steadily raise product prices over the past year to counter spiraling costs of ingredients amid a cost-of-living crisis.
Meanwhile demand, especially for Kellogg’s pricier cereals, has seen little pushback as shoppers have refrained from trading down to cheaper alternatives and are still willing to pay more for their favorite snack brands.
The Pringles maker’s strong outlook reflects comments from peers PepsiCo (NASDAQ:PEP) Inc and Hershey Co (NYSE:HSY), who also lifted their annual forecasts in recent months boosted by price increases.
However, organic volumes declined by 1.9% in the first quarter, while overall prices rose 15.6%. The company had posted a 0.6% rise in volumes in the fourth quarter.
Kellogg expects its full-year adjusted profit per share to fall between 1% and 3%, compared with the prior forecast for a decline of 2% to 4%.
The Corn Flakes maker sees organic net sales growth between 6% and 7% in 2023, against earlier forecast of 5% to 7% growth.
Net sales in the first quarter rose 10.4% to $4.05 billion, beating analysts’ estimate of $3.95 billion, according to Refinitiv IBES data.
Excluding items, Kellogg earned $1.10 per share, topping estimates of 99 cents.
