Kellogg Chalks Out FY24 & Long-Term Outlook For Kellanova And WK Kellogg

Kellogg Co K disclosed it is on track to close the previously announced separation into two public companies focused on global snacking and North American cereal in Q4 FY23.

The company had earlier named the global snacking, international cereal and noodles, plant-based foods, and North American frozen breakfast business as Kellanova, which will trade on the New York Stock Exchange (NYSE) under the ticker symbol "K."

The North American cereal business was named WK Kellogg Co.

FY24 Guidance: The company expects Kellanova to deliver sales of $13.4 billion-$13.6 billion, adjusted-basis EBITDA of about $2.25 billion-$2.3 billion, and adjusted EPS of $3.55-$3.65 in 2024.

On the other hand, WK Kellogg Co is expected to generate net sales of around $2.7 billion and adjusted-basis EBITDA of about $255 million-$265 million in 2024.

The company expects WK Kellogg Co to pay cash dividends, with a payout ratio of about 45% in 2024.

Long Term Outlook: Kellanova is projected to deliver long-term annual net sales growth of 3%-5% (organic basis), adjusted operating profit (currency neutral) of 5%-7%, and adjusted EPS (currency neutral) of 7%-9%.

Also, WK Kellogg Co is projected to boost adjusted-basis EBITDA margins by 500 basis points by 2026 through supply chain modernization and stable top-line growth.

This month, Kellogg reported second-quarter FY23 organic sales growth of 7.1% year-on-year to $4.14 billion, beating the analyst consensus of $4.05 billion, and adjusted EPS of $1.25 beat the analyst consensus of $1.11.

Price Action: K shares are trading higher by 0.76% at $63.95 on the last check Wednesday.