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Sep 26, 2020
Kellanova Q3 2020 Earnings Report
Kellogg Company reported better-than-expected financial results and solid in-market performance across all four regions, leading to an increased full-year outlook amidst an uncertain business environment.
Key Takeaways
Kellogg Company reported a nearly 2% increase in net sales, driven by strong organic growth and elevated demand for at-home consumption during the COVID-19 pandemic. The company raised its full-year financial guidance due to better-than-expected results in the third quarter.
Kellogg continued to execute well against its priorities during the global COVID-19 pandemic.
Net sales growth was led by emerging markets and strong consumption in key developed markets.
Significant increases in brand investment around the world aimed at further strengthening competitive positions.
Strong cash generation enabled the Company to continue to enhance financial flexibility.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Kellogg Company raised its full-year financial guidance on the strength of its third quarter results.
Positive Outlook
- Organic net sales growth is now expected to finish 2020 at approximately 6% year on year, up from previous guidance of approximately 5%.
- Currency-neutral adjusted operating profit growth is now projected to grow approximately 2% year on year, an improvement from previous guidance of a decline of approximately (1)%, and still weighed down by the absence of businesses divested in July, 2019.
- Currency-neutral adjusted earnings per share for the full year is now estimated to increase by approximately 2% year on year, an improvement from previous guidance of a decline of about (1)%, and still weighed down by the absence of businesses divested in July, 2019.
- Net cash provided by operating activities is now expected to finish 2020 at $1.8 to $1.9 billion, well above the previous guidance range of $1.5-1.6 billion, with capital expenditure of approximately $0.5 billion.
- Cash flow is now expected to finish 2020 at $1.3 to $1.4 billion, a significant improvement from the previous guidance of approximately $1.0 billion.
Challenges Ahead
- Excluded from this guidance are any significant supply chain or other prolonged 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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