Kellanova K reported third-quarter 2023 results for what was then Kellogg Company. Reported net sales declined 0.2% year-on-year to $3.94 billion, beating the analyst consensus estimate of $3.62 billion. Organic sales increased 3.9%.
Net sales were held flat by adverse currency translation and the divestiture of its business in Russia.
On October 2, 2023, Kellogg Company completed the separation of its North America cereal business, resulting in two independent companies, Kellanova (formerly Kellogg Company) and WK Kellogg Co KLG.
Related: Cereal Brand Gets Soggy After Kellanova Spin-Off, Analyst Blames Headwinds On Debt
Adjusted EPS of $1.03 beat the analyst consensus estimate of $0.82.
North America's sales decreased 0.4%, Europe grew 9.5%, Latin America's sales gained 19.2%, and Asia Pacific, Middle East, and Africa's (AMEA) sales fell 14.3%.
Selling, general and administrative expenses rose 9.7% Y/Y to $861 million. Operating margin was 12.2%, and operating income for the quarter increased 31% to $482 million.
The company's reported gross margin expanded 490 basis points to 34.1%, while the adjusted gross margin expanded 240 basis points to 33.2%.
The company held $1.1 billion in cash and equivalents as of September 30, 2023, and generated an operating cash flow of $1.4 billion year-to-date.
Outlook: Kellanova provided guidance for its fourth quarter of 2023, which will be the first reporting period as a stand-alone company. Kellanova sees Q4 revenue of $3.10 billion versus an estimate of $3.14 billion.
The company expects Q4 adjusted EPS of $0.73 - $0.76 versus an estimate of $0.76. K sees Q4 adjusted operating profit of $380 million - $390 million.
Price Action: K shares are trading higher by 1.73% at $51.78 on the last check Wednesday.
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