Kellogg Co on Thursday forecast smaller drop in annual profit than previously estimated and raised lower end of sales outlook, boosted by multiple price hikes as well as steady demand for its breakfast snacks and cereals.
Kellogg, 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 such as wheat, corn and edible oils 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 company expects its adjusted profit per share to decline between 1% and 3% in 2023, compared with the prior forecast for a decline of 2% to 4%.
The Corn Flakes maker now expects organic net sales growth between 6% and 7% for 2023, compared with the previous forecast of 5% to 7% growth.
Net sales rose to $4.05 billion in the first quarter from $3.67 billion a year earlier. Analysts on average were expecting sales of $3.95 billion, according to Refinitiv IBES data.
Stocks slid slightly in premarket trading.
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