Kellanova Q3 shows snack softness as Mars acquisition advances

Kellanova reported mixed third-quarter results and continued softness across its global snack portfolio as the company moves closer to its planned acquisition by Mars. The two companies entered a definitive agreement on August 14, 2024, under which Mars will acquire Kellanova for $83.50 per share in cash. Kellanova shareholders approved the deal on November 6, 2024. The acquisition remains subject to regulatory clearance, and the company said in its third-quarter report that it expects the acquisition "to close towards the end of 2025."

Third-quarter net sales reached $3.26 billion, a 0.9% increase from the year prior, though reported operating profit declined 0.6%. The company incurred $16 million in pre-tax merger-related expenses during the quarter as integration planning continued.

Snack performance remained a challenge in several key regions as management noted “lingering softness in snacks” across parts of the global portfolio. In North America, organic snack net sales fell 3% for the quarter. Europe posted a 5% organic decline in snacks while the Asia, Middle East and Africa region recorded a 1% organic decrease. Latin America was the only region to report snack growth, with organic net sales up 3.6%.

Kellanova said North America’s overall net sales decreased 3% in the quarter, driven primarily by volume declines in snacks and frozen foods.

The company did not provide forward-looking guidance as it prepares for the Mars acquisition. “We continue to work toward closing the Mars transaction and embarking on our exciting next chapter,” said Chairman, President and CEO Steve Cahillane, in the Q3 results statement.

The company’s results may reflect, in part, shifting consumer behavior within core snack categories.