Kellogg Co. Reports 11 Percent Net Sales Growth In Second Quarter

July 29, 2011

Kellogg Co. announced second quarter 2011 reported net sales growth of 11 percent to $3.4 billion. Internal net sales, which exclude the effects of foreign currency translation, rose 6 percent over the same period. Second quarter 2011 operating profit of $543 million increased 12 percent on a reported basis and 8 percent on an internal basis. While the company was lapping soft comparisons in second quarter 2010, the performance reflected strong innovation and the benefit from pricing actions taken over the first half 2011 which helped offset higher input costs.

Reported earnings for the second quarter 2011 were $343 million, or $0.94 per diluted share, an increase of 19 percent from second quarter 2010 reported earnings of $0.79 per diluted share. On a currency-neutral basis, second quarter 2011 earnings per share grew 13 percent.

"We continue to build momentum as demonstrated by our solid first half top-line results. During the second quarter, we benefited from improved net price realization and were pleased with the performance of our strong innovation," said John Bryant, Kellogg Company's president and chief executive officer in a prepared statement. "As we look to the back half of 2011, we expect continued sales growth driven by price and mix and are confident in our innovation line up and commercial plans."

During the second quarter 2011, Kellogg North America net sales were $2.2 billion, an 8 percent increase on both a reported and internal basis. On an internal basis, North America retail cereal net sales rose 13 percent reflecting higher net price realization, the strength of recently launched innovation, as well as easier comparisons to second quarter 2010.

North America retail snacks delivered internal net sales growth of 3 percent driven by the crackers business.

North America frozen and specialty channels internal net sales grew 10 percent.

Second quarter 2011 North America operating profit increased 12 percent on a reported basis and 11 percent on an internal basis.


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