Carlos Gutierrez, CEO of Kellogg, has warmed that the company will face painful times ahead before it emerges stronger. The US cereals group posted disappointing fourth-quarter results on Thursday (25 January).

Gutierrez was hopeful that the change in its business strategy, including focusing its resources on the US, spending more in marketing to build specific brands and changing its sales infrastructure, would be absorbed by the company over three quarters of this year. Kellogg is also seeking diversify away from its dependence on cereals with the acquisition of Keebler. In October, Kellogg agreed to buy the second-largest US cookie maker for US$4.4bn.

“This will create some near-term pain; but it will make us a stronger company,” said Mr Gutierrez. He added that the Keebler deal should be closed by early March.

In the fourth quarter, Kellogg net earnings were US$142.7m, or 35 cents per share, against US$136.7m, or 34 cents. This beat expectations by 2 cents, and excluded a restructuring charge of US$49.5m after tax. The company cited inventory cuts by retailers and a fall in profits in its convenience foods for the disappointing fourth-quarter results Mr Gutierrez also said he was concerned over the sluggish growth in the critical cereals category.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.