Latest news with #KLG
Yahoo
09-05-2025
- Business
- Yahoo
Long-Term Decline In Cereal Market Poses Structural Challenges For Kellogg, Analyst Says
J.P. Morgan analyst Ken Goldman on Tuesday assigned a Neutral rating on the shares of WK Kellogg Co (NYSE:KLG) with a price forecast of $19.00. The company reported first-quarter 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. KLG revised its 2025 outlook, now expecting organic net sales to decline 2.0% to 3.0%, and adjusted EBITDA to be flat or down 2.0%, versus previous forecasts of milder declines and EBITDA outlook reflects modest tariff impacts on raw materials, assuming continued trade exemptions with Canada and Mexico, though the company warned future tariff changes could further affect results. On the positive side, the analyst sees significant potential for margin expansion and believes the stock's current low valuation could help support its price. However, the analyst remains cautious about the company's projections for EBITDA margin gains, especially given weak sales trends. The long-term decline in the cereal market poses structural challenges, and upcoming restructuring and capital expenditures will strain cash flow, noted the analyst. The analyst said KLG shares should trade at a discount compared to larger packaged food companies due to ongoing difficulties in the cereal category, substantial upcoming spending on capital projects and restructuring, and the company's smaller scale. Price Action: KLG shares closed lower by 3.90% to $17.23 on Wednesday. Read Next:Photo by JHVEPhoto via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article Long-Term Decline In Cereal Market Poses Structural Challenges For Kellogg, Analyst Says originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
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.
Business Insider
07-05-2025
- Business
- Business Insider
WK Kellogg Co (KLG) Receives a Hold from Jefferies
Jefferies analyst Robert Dickerson reiterated a Hold rating on WK Kellogg Co (KLG – Research Report) today and set a price target of $17.00. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. According to TipRanks, Dickerson is a 4-star analyst with an average return of 3.5% and a 57.41% success rate. Dickerson covers the Consumer Defensive sector, focusing on stocks such as Conagra Brands, General Mills, and TreeHouse Foods. Currently, the analyst consensus on WK Kellogg Co is a Moderate Sell with an average price target of $17.86. KLG market cap is currently $1.55B and has a P/E ratio of 21.67.
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.
