Rising prices for products such as Fruit Loops and Eggo Waffles have helped give Kellogg some confidence in its ability to handle cost inflation, supply chain bottlenecks and the lingering impact of his recent labor strike.
Steve Cahillane, chief executive, acknowledged that business conditions would remain “challenging” in 2022, but Kellogg expected organic net sales growth of 3% and adjusted earnings per share growth of 1-2%.
It was better than Wall Street forecasts and, in addition to beating analysts’ expectations for fourth-quarter revenue and earnings, it helped push Kellogg’s shares up more than 3% at the end of the month. lunch time Thursday.
Amid soaring inflation in the United States and elsewhere, the company has raised prices for its products, helping to moderate cost inflation associated with materials like corn, oil and packaging.
Executives said in an earnings call on Thursday that they plan to weather inflation in 2022, expect to hit double-digit rates, thanks to growth management initiatives from productivity and income.
Price increases, along with strong momentum in international markets, helped offset the sales impact of a three-month strike late last year involving around 1,400 Kellogg workers at four Kellogg factories. breakfast cereals in the United States.
Cahillane said he expects the impact of the strike to affect sales in the first and second quarters of 2022 as the company rebuilds inventory.
Due to the impact of the strike, Kellogg’s fourth-quarter net sales fell 1.3% from a year ago to $3.42 billion, but that was a even exceeded analysts’ estimates of $3.39 billion. Quarterly earnings of $1.26 per share more than doubled from a year earlier and beat Wall Street’s estimate of $0.79 per share.