Published by Global Banking and Finance Review
Posted on May 6, 2025
(Reuters) -WK Kellogg cut its annual organic sales and core profit forecasts on Tuesday after weaker consumer spending on its higher-priced products including Frosted Flakes and Apple Jacks cereals.
Shares of the Battle Creek, Michigan-based company fell nearly 3% in premarket trading after it missed first-quarter sales and profit expectations.
Customers are bracing for another inflationary market burdened by price increases as companies try to navigate higher input costs brought on by U.S. President Donald Trump's erratic tariff implementation.
WK Kellogg has already witnessed pushback from consumers after it ramped up prices over the last several quarters to counter input costs, pushing cost-conscious shoppers away.
Its product pricing rose 3%, while volumes slumped 8.6% in the reported quarter.
Kraft Heinz and Kellanova have also reported bleak quarterly results, given subdued consumer spending in the United States. The U.S. economy contracted for the first time in three years in the first quarter, hit by a flood of imports as businesses raced to avoid higher costs from tariffs, as well as softening consumer spending.
WK Kellogg expects full-year organic net sales to now decrease between 2% and 3%, compared with a prior expectation of a 1% fall.
It expects full-year net adjusted EBITDA, or earnings before interest, tax, depreciation and amortization, between $270 million and $275 million, compared with a previous expectation of between $286 million and $292 million.
The Froot Loops maker said its 2025 outlook includes a modest impact from tariffs, primarily related to sourcing raw materials outside North America.
WK Kellogg's quarterly net sales fell 6.2% to $663 million, compared with analysts' average expectation of $679.5 million, according to data compiled by LSEG.
It reported earnings of 20 cents per share, missing analysts' estimate of 40 cents per share.
(Reporting by Ananya Mariam Rajesh and Anuja Bharat Mistry in Bengaluru; Editing by Pooja Desai)
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