Higher Product Prices Prop Up Kellogg

Aug. 5, 2022
Consumer loyalty in the face of higher prices helped Kellogg Co. show good results for the most recent quarter.

Consumer loyalty in the face of higher prices helped Kellogg Co. show good results for the most recent quarter.

Overall net sales for the quarter ending July 2 were up 8.7%, to $3.86 billion, compared with the same period last year. In the North America segment, sales were up 12% year-over-year, to $2.25 billion. Overall operating profit was down 18%, but when currency fluctuations and other costs are taken into account, adjusted operating profit increased 10%. Profit for the North America segment went up 5.2%, to $382 million.

The good results came about in spite of Kellogg charging an average of 14% more for its products during the quarter. Those increases helped buoy sales numbers despite overall sales volume declining 1.5%, a situation Kellogg blamed in part on shortfalls in its cereal inventory.

In a federal filing, Kellogg attributed the good results to its higher prices, a recovery from last year’s strike of four U.S. cereal plants, and 16% sales growth in the snacks segment. The growth in snacks is encouraging news for Kellogg as it prepares to break into three companies, one of them devoted to snacks.

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