US cereal and snacks giant Kellogg has recorded a drop in first-quarter profit as higher costs hit earnings.
Earnings dropped to US$311m in the three months to 30 March, an 11.4% decline on the prior year period. Operating profit was down 4.5% to $503m. Kellogg’s measure of underlying internal operating profit, which excludes the effects of foreign currency translation, acquisitions, dispositions, mark-to-market accounting and integration costs, slid 5.8%.
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Kellogg said the decline in profits was largely due to the recognition of “considerable” cost-of-goods-sold inflation in the quarter.
Revenue, however, was up 12.2% to $3.86bn, boosted by growth in most of the group’s regions.
“We saw good comparable revenue growth in many regions around the world and the Pringles business continued to post strong results,” said CEO John Bryant. “As a result, we’re also pleased to report that we’re on-track to meet our guidance for the full-year.”
The company reaffirmed its EPS guidance for the full year at between $3.82 and $3.91.
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