Latest news with #GaryPilnick
Yahoo
17-05-2025
- Business
- Yahoo
Kellogg sounds alarm on unexpected shift in customer behavior
Food giant Kellogg () , which owns popular cereal brands such as Froot Loops, Frosted Flakes, and Apple Jacks, has noticed that customers are starting to change their minds about breakfast. In response to this trend, its CEO is flagging what's causing this significant shift in customer behavior. In its first-quarter earnings report for 2025, Kellogg revealed that its organic net sales declined by 5.6% year-over-year during the quarter, while its net income dropped by a whopping 45.5%. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰💵 In the report, Kellogg CEO Gary Pilnick said that the company's first-quarter performance was 'lower than expected.'In response to weaker consumer demand, Kellogg is predicting that its organic net sales this year will shrink by 2% to 3%, compared to its previous expectation of a 1% decline. In prepared remarks to investors, Pilnick flagged that the company's cereal category faced declining sales as consumers are increasingly leaning more toward cereal brands that focus on health and nutrition, which have rapidly become more popular. 'Granola, natural and organic cereal, and health-forward cereal brands experienced double-digit growth in the quarter, while our N&O (natural and organic) brands did not participate in this growth at nearly the same rate,' said Pilnick in his remarks. During an earnings call on May 6, Pilnick said he doesn't believe the trend will lose steam anytime soon. 'In our category, what we're also seeing is some of our consumers are also willing to pay more,' said Pilnick. 'It's an interest in health and nutrition. I think that's going to continue. I think this is simply the continuation of a trend that we saw coming that at some point started to accelerate.'Recently, consumers have been cracking down on the ingredients in their food products as they have grown more health-conscious in recent years. This is a trend that kicked off after the Covid-19 pandemic. Seed oils such as canola, corn, sunflower, vegetable, and palm are some of the many ingredients that have recently drawn scrutiny from consumers for being overly processed and contributing to inflammation in the body. Despite being approved by the U.S. Food and Drug Administration, synthetic dyes such as Red 40, Blue 1, and Yellow 6, which are commonly found in processed foods, have also faced criticism for being linked to health issues such as cancer and hyperactivity in children. Texas Attorney General Ken Paxton in April 2025 began investigating Kellogg for alleged false claims that it had removed artificial dyes from its products, when it appears that some of these ingredients are still present in a few Kellogg's cereals, at least in the U.S. Newer cereal brands offering products without these ingredients include Seven Sundays, Magic Spoon, and Three Wishes, which have grown in popularity. During the earnings call, Pilnick said that consumers focusing more on healthier cereal options can be beneficial for the company. 'The category is holding in, and it's shifting,' said Pilnick. 'And again, we will shift with it.' Kellogg plans to rapidly accelerate its health-focused initiatives in order to win back customers. This includes boosting advertising for its natural and organic cereal brands such as Kashi. More Retail: AT&T quietly issues stern warning to customers Sam's Club makes a big change to a beloved membership perk GameStop announces risky move amid store closures Kellogg also aims to emphasize in an upcoming advertising campaign that its cereals, such as Frosted Flakes, Corn Flakes, and Rice Krispies, start with four simple ingredients before vitamins and minerals are added. It plans to communicate this message in updated front-of-package claims. In addition, Kellogg will highlight that its cereals contain protein and fiber, two ingredients the company claims consumers often seek in their food. 'We know that there's continued interest in value and growing interest in health and wellness,' said Pilnick. 'That's the place that we're going to go.'
Miami Herald
07-05-2025
- Business
- Miami Herald
Kellogg sounds alarm on unexpected shift in customer behavior
Business Kellogg sounds alarm on unexpected shift in customer behavior Food giant Kellogg (KLG) , which owns popular cereal brands such as Froot Loops, Frosted Flakes, and Apple Jacks, has noticed that customers are starting to change their minds about breakfast. In response to this trend, its CEO is flagging what's causing this significant shift in customer behavior. In its first-quarter earnings report for 2025, Kellogg revealed that its organic net sales declined by 5.6% year-over-year during the quarter, while its net income dropped by a whopping 45.5%. Don't miss the move: Subscribe to TheStreet's free daily newsletter In the report, Kellogg CEO Gary Pilnick said that the company's first-quarter performance was "lower than expected." Related: Coca-Cola suffers an alarming loss from major boycott In response to weaker consumer demand, Kellogg is predicting that its organic net sales this year will shrink by 2% to 3%, compared to its previous expectation of a 1% decline. Kellogg's breakfast cereals aren't making it into consumers' grocery carts as often. Bloomberg/Getty Images Kellogg CEO sheds light on what's causing declining sales In prepared remarks to investors, Pilnick flagged that the company's cereal category faced declining sales as consumers are increasingly leaning more toward cereal brands that focus on health and nutrition, which have rapidly become more popular. "Granola, natural and organic cereal, and health-forward cereal brands experienced double-digit growth in the quarter, while our N&O (natural and organic) brands did not participate in this growth at nearly the same rate," said Pilnick in his remarks. During an earnings call on May 6, Pilnick said he doesn't believe the trend will lose steam anytime soon. "In our category, what we're also seeing is some of our consumers are also willing to pay more," said Pilnick. "It's an interest in health and nutrition. I think that's going to continue. I think this is simply the continuation of a trend that we saw coming that at some point started to accelerate." Related: PepsiCo CEO addresses major customer concerns amid low sales Recently, consumers have been cracking down on the ingredients in their food products as they have grown more health-conscious in recent years. This is a trend that kicked off after the Covid-19 pandemic. Seed oils such as canola, corn, sunflower, vegetable, and palm are some of the many ingredients that have recently drawn scrutiny from consumers for being overly processed and contributing to inflammation in the body. Despite being approved by the U.S. Food and Drug Administration, synthetic dyes such as Red 40, Blue 1, and Yellow 6, which are commonly found in processed foods, have also faced criticism for being linked to health issues such as cancer and hyperactivity in children. Texas Attorney General Ken Paxton in April 2025 began investigating Kellogg for alleged false claims that it had removed artificial dyes from its products, when it appears that some of these ingredients are still present in a few Kellogg's cereals, at least in the U.S. Newer cereal brands offering products without these ingredients include Seven Sundays, Magic Spoon, and Three Wishes, which have grown in popularity. Kellogg unveils plan to attract customers During the earnings call, Pilnick said that consumers focusing more on healthier cereal options can be beneficial for the company. "The category is holding in, and it's shifting," said Pilnick. "And again, we will shift with it." Kellogg plans to rapidly accelerate its health-focused initiatives in order to win back customers. This includes boosting advertising for its natural and organic cereal brands such as Kashi. More Retail: Kellogg also aims to emphasize in an upcoming advertising campaign that its cereals, such as Frosted Flakes, Corn Flakes, and Rice Krispies, start with four simple ingredients before vitamins and minerals are added. It plans to communicate this message in updated front-of-package claims. In addition, Kellogg will highlight that its cereals contain protein and fiber, two ingredients the company claims consumers often seek in their food. "We know that there's continued interest in value and growing interest in health and wellness," said Pilnick. "That's the place that we're going to go." Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published May 7, 2025 at 12:47 PM.
Yahoo
07-05-2025
- Business
- Yahoo
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. Navigate the shifting tariff landscape with real-time data and market-leading analysis. Request a free demo for GlobalData's Strategic Intelligence here. "Lower Q1 sales, tariff outlook sees WK Kellogg cut forecasts" was originally created and published by Just Food, a GlobalData owned brand.
Yahoo
06-05-2025
- Business
- Yahoo
WK Kellogg Q1 Profit Slumps, Flags Modest Tariff Impact From Raw Material Sourcing
WK Kellogg Co (NYSE:KLG) reported first-quarter results on Tuesday. The company clocked earnings per share of 20 cents, missing the street view of 34 cents. Quarterly sales of $663 million missed the analyst consensus estimate of $679.49 million. Quarterly reported net sales declined 6.2% year-over-year, while organic net sales were down 5.6% from the prior year. The drop in organic net sales was driven by reduced retailer inventory tied to Easter holiday timing, the comparison against a major prior-year promotion, and softer-than-expected consumption trends. Also Read: US Trade Deficit Soars To Record $140B As Imports Rocket Ahead Of Trump's Tariffs Adjusted EBITDA in the quarter under review was $72 million, down 4% year over year. This decrease was driven by lower sales volume. Adjusted EBITDA margin expanded to 10.8% from 10.6% in the year-ago period. In the first quarter, price/mix rose 3.0% while volume declined 8.6%. Chairman and CEO Gary Pilnick said the company remains on track to achieve a margin improvement of around 500 basis points by the end of 2026. 'In the first quarter, we saw consumers continue to focus on health and nutrition, which we view as a positive development for the category,' Pilnick added. Outlook: The company said 2025 organic net sales are now projected to fall approximately between (2.0)% and (3.0)%, compared to the prior guidance of a (1.0)% decline. 2025 adjusted EBITDA growth is now projected to be flat to down (2.0)%, compared to the prior guidance of 4% to 6% growth. The 2025 financial outlook includes a modest impact from tariffs, mainly tied to raw materials sourced outside North America. It assumes most production remains exempt from tariffs on trade with Canada and Mexico. However, the company said, there is no guarantee that these exemptions will continue or that future tariffs will not further affect the business and financial results. Price Action: KLG shares are trading higher by 2.25% to $17.75 at last check on Tuesday. Read Next: Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? This article WK Kellogg Q1 Profit Slumps, Flags Modest Tariff Impact From Raw Material Sourcing originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
