Lower Q1 sales, tariff outlook sees WK Kellogg cut forecasts
A decline in first-quarter sales and concerns about the impact of US tariffs have led WK Kellogg to lower forecasts for the full year.
The cereal maker expects its organic net sales to decline by 2-3% in 2025, compared to its previous projection of a 1% decrease.
WK Kellogg has also lowered its forecast for adjusted EBITDA. It now expects that metric to be, at best, flat year on year, or, at worst, down 2%. The group had been forecasting an increase of 4-6%.
Announcing its first-quarter financial results yesterday (6 May), WK Kellogg pointed to "weaker than expected consumption trends".
It also said its outlook "now includes a modest impact from tariffs, primarily related to the sourcing of raw materials outside of North America".
The company said its forecast "assumes that most of our production remains exempt from tariffs on imports from and exports to Canada and Mexico".
However, it added: "There can be no assurance that this suspension will
remain in place indefinitely or whether any new or expanded tariffs may further impact our business and results of operations."
For the quarter to 29 March, WK Kellogg reported a 45.5% drop in net income to $18m.
Net sales declined 6.2% of $663m compared to the same period last year. Organic net sales fell 5.6% to $667m.
The Rice Crispies manufacturer reported a first-quarter operating profit of $20m, down 56.5% year-over-year. Adjusted EBITDA also fell 4% to $72m, primarily due to lower sales volumes.
WK Kellogg chairman and CEO Gary Pilnick said: 'Despite the lower than expected first quarter performance which resulted in revising our 2025 outlook, we continue to make great progress on our strategic priorities, including the supply chain modernisation initiative.
"We remain on track to deliver circa 500 basis points of margin improvement as we exit 2026."
Pilnick added: 'In the first quarter, we saw consumers continue to focus on health and nutrition, which we view as a positive development for the category.
'We believe our portfolio is well positioned to meet the needs of our consumers, and we are taking further actions to accelerate our plans in this area.'
In August, WK Kellogg announced the closure of its plant in Omaha, Nebraska and scaled back production at its Memphis facility in Tennessee.
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"Lower Q1 sales, tariff outlook sees WK Kellogg cut forecasts" was originally created and published by Just Food, a GlobalData owned brand.
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