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Mar 28, 2020
Kellanova Q1 2020 Earnings Report
Kellogg's reported better-than-expected results due to increased demand during the COVID-19 pandemic and the Deploy for Growth strategy.
Key Takeaways
Kellogg Company reported a decrease in net sales by 3.1%, but organic net sales increased by 8.0%. The company's performance was aided by increased demand due to the COVID-19 pandemic and the Deploy for Growth strategy. They affirmed their full-year financial guidance.
Priorities have been ensuring employees' health and safety, supplying food, and aiding communities during the COVID-19 pandemic.
The Deploy for Growth strategy continues to drive business momentum.
Demand for products increased significantly in March due to consumers stocking up on packaged foods.
The company affirmed its full-year financial guidance, with a shift in sales and earnings toward the first half of the year.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Kellogg Company affirmed its full-year financial guidance, with sales and profit delivery shifting toward the first half of the year.
Positive Outlook
- Organic net sales growth of +1-2%.
- Cash provided by operating activities is projected to be $1.5 to $1.6 billion.
- Capital expenditures are expected to be approximately $0.6 billion.
- Cash flow, defined as cash provided by operating activities reduced by capital expenditures, continues to be projected at $0.9 to $1.0 billion.
Challenges Ahead
- Adjusted operating profit on a currency-neutral basis decline of approximately (4)%, as the absence of results from divested businesses more than offsets growth in the base business.
- Adjusted earnings per share, on a currency-neutral basis, decline of (3) to (4)%, as the absence of results from divested businesses more than offsets growth in the base business.
- Excluded from this guidance are significant supply chain or other market disruptions related to the pandemic or global economy.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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