Cereals and snacks titan Kellogg (K) - Get Report reported stronger-than-expected first-quarter earnings amid the coronavirus pandemic, tying sales growth in part to consumers stocking up during the pandemic.
Adjusted earnings per share dipped to 99 cents in the quarter from $1.01 a year earlier. But the latest number topped a FactSet survey's analyst forecast of 95 cents.
GAAP net income registered $350 million in the latest quarter, or $1.01 a share, up from $285 million, or 82 cents, in the year-earlier quarter. FactSet's survey was looking for 94 cents.
Sales fell 3.1% to $3.41 billion in the latest quarter from $3.52 billion, thanks to the divestiture of Kellogg’s cookies, fruit snacks, pie crusts and ice cream cones operations. But the latest number beat analysts’ prediction of $3.39 billion.
Organic sales, which exclude the impact of divestitures and currencies, climbed 8%.
Cereal sales gained 2.7% and frozen product sales rose 8.4%. Snacks sales fell 17.3%.
“[Slightly] more than half of the growth in the first quarter was attributable to elevated consumer purchases during the global covid-19 pandemic, with the balance of this growth reflecting momentum in the underlying business across regions and categories,” the Battle Creek, Mich., company said in a statement.
“To keep up with suddenly increased demand for its products amidst stay-at-home guidelines around the world, the company increased production, focusing on fewer items.”
Kellogg affirmed its 2020 adjusted-EPS estimate as a decline of 3% to 4%, while analysts project a 3.5% decrease.
Kellogg shares at last check stood at $65.50, up 0.9%. They have slid 5% over the past three months, compared with a 10% drop for the S&P 500.