Kellanova K reported second-quarter results, with adjusted EPS and sales exceeding expectations despite external challenges.
The company reported adjusted earnings per share of $1.01, beating the analyst consensus of 90 cents.
Quarterly sales of $3.192 billion (down 4.7%) beat the street view of $3.150 billion.
Despite negative impacts from adverse currency translation and the 2023 divestiture of its Russian business, the company’s organic growth stayed within its long-term target range.
The company said it achieved double-digit growth in operating profit and EPS, reflecting faster-than-expected margin improvements.
“Our top-line growth featured a return to volume growth in two of our Regions, and improvements in other markets, led by our biggest brand Pringles,” commented Steve Cahillane, Kellanova’s Chairman, President and Chief Executive Officer.
Adjusted operating profit in the quarter under review grew 13.3% to $502 million.
“This was supported by fully restored commercial activity, including a double-digit increase in brand building investment while still improving profit margins,” Cahillane added.
Outlook: Kellanova has increased its FY24 guidance, raising its organic basis net sales growth forecast to 3.5% or better, from its previous guidance of approximately 3% or better. The company also raised its adjusted EPS guidance from $3.55-$3.65 to $3.65-$3.75 against the consensus of $3.62.
Price Action: K shares are trading higher by 5.16% to $61.15 at last check Thursday.
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