Kellogg today (30 April) posted a slight increase in quarterly profit and reaffirmed its guidance for 2009.
For the quarter ended 4 April, net earnings were US$321m, a 2% increase from last year’s $315m.
First quarter reported earnings per diluted share were $0.84, a 4% increase on a reported basis and a 14% increase on a currency-neutral basis.
Kellogg said it remains confident that it can achieve high single-digit EPS growth on a currency-neutral basis, which excludes the effects of foreign currency translation.
CEO David Mackay said the company performed ahead of expectations during the first quarter despite “cost pressures and the difficult economic environment”. He reiterated the company’s previous 2009 guidance of 3-4% internal net sales growth and mid single-digit internal operating profit growth.
Despite this, first quarter net sales dropped 3% to $3.2bn. Internal net sales growth, which excludes the effects of foreign currency translation and acquisitions, rose 4%.
Operating profit also experience a drop, declining to $529m, a 3% decline on a reported basis, however on an internal basis it was a 7% increase.
Kellogg North America posted net sales growth of 3%; internal net sales growth was 4%. North America Retail Cereal delivered internal net sales growth of 6% for the quarter.
Retail snacks posted internal net sales growth of 2%, which was negatively impacted by the peanut-related recalls. North America frozen and specialty channels businesses together delivered internal net sales growth of 6%.
Kellogg International posted a first quarter 2009 reported net sales decline of 14%. Internal net sales growth in Europe was 1% and was negatively impacted by some “challenging retailer negotiations”, the company said, which have now been resolved. Latin America internal net sales increased 8%, while Asia Pacific internal net sales rose 11%.
“Our strong start increases our visibility with respect to another year of sustainable and dependable performance. For 2009, we will focus on driving solid top-line growth, considerable cost savings and strong reinvestment,” Mackay said.