Kellogg Company Reports First Quarter 2015 Results, Net Sales Down 5%

May 6, 2015

BATTLE CREEK, Mich., May 5, 2015 /PRNewswire/ -- Kellogg Company (NYSE: K) today announced currency-neutral comparable first-quarter results for net sales, operating profit, and earnings per share that were greater than the company's expectations.

First quarter 2015 reported net sales decreased by 5.0 percent to $3.6 billion, primarily due to the effect of currency translation. Currency-neutral comparable net sales decreased by 0.3 percent over the same period; this result included growth in each of the international regions. First quarter 2015 reported operating profit was $384 million, a decline of 37.5 percent; this decrease was driven primarily by the impact that asset returns and changes in interest rates had on pension plans. The decline in currency-neutral comparable operating profit was largely the result of slightly lower net sales.

Reported earnings for the first quarter of 2015 were $227 million, or $0.64 per share, a decrease of 43 percent from the $1.12 per share reported in the first quarter of last year. This quarter's reported earnings per share included negative impacts from mark-to-market of $0.13 per share and costs associated with the Project K efficiency and effectiveness program of $0.13 per share. In addition, reported results included $0.01 per share of integration costs related to the acquisition of Pringles and Bisco Misr and $0.07 of other costs. Excluding these items, comparable first quarter 2015 earnings were $0.98 per share, greater than the company's expectations. This result included a negative impact of $0.06 per share from currency translation; comparable earnings per share excluding the impact of currencies would have been $1.04 per share.

North America

Net sales posted by Kellogg North America were $2.4 billion in the first quarter, a reported decrease of 3.7 percent; currency-neutral comparable net sales decreased by 2.8 percent. The U.S. Morning Foods segment posted a currency-neutral comparable net sales decline of 2.9 percent, which included improved trends in the Cereal business. Currency-neutral comparable net sales in the U.S. Snacks segment decreased by 1.1 percent, also reflecting an improvement in sales trends. The U.S. Specialty Channels segment posted a 2.5 percent decline in currency-neutral comparable net sales in the quarter due to a discrete item. The North America Other segment, which is now composed of the U.S. Frozen Foods, Kashi, and Canadian businesses, posted a 6.1 percent decrease in currency-neutral comparable net sales. Reported operating profit in North America decreased by 9.9 percent; currency-neutral comparable operating profit declined by 8.0 percent, largely as the result of lower sales. View the full report here.


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