US cereal maker Kellogg has reported strong third quarter sales growth, driven by significantly increased levels of brand-building investment.
The company reported net earnings of US$274.3m, or 66 cents per share, for the quarter, compared to $247.0m, or 59 cents per share, in the comparable period of last year.
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“We are very pleased with the strong results we have achieved this year,” said Jim Jenness, Kellogg’s chairman and chief executive officer. “This strength has provided us the flexibility to significantly increase our investment in future growth.”
Net sales in the third quarter increased by 7.3%, to $2.62bn. Excluding the effect of currency translation, Kellogg’s internal sales growth was 6.6%.
Kellogg raised its guidance for full-year 2005 earnings to $2.32-2.34 per share, from its previous range of $2.30-2.33 per share. The company said the increase is due to the strong business momentum and excellent execution posted so far this year. The company expects mid single-digit sales growth in the fourth quarter. Earnings growth in the quarter is expected to be flat to down slightly due to there being one less selling week in the period, continued significant investment in brand building, and investment in other growth initiatives.
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