Kellogg Sales Continue to Slide

Kellogg Co. on Thursday said sales slid 11% in its fourth quarter, though the company's cost-cutting efforts helped drive profit that beat Wall Street views.

Like other big packaged-food producers, Kellogg has faced challenges from shifting consumer tastes in the U.S. as well as foreign exchange hits on its sales abroad. On Thursday, the company said cereal trends continued to improve in the fourth quarter.

Last year, the Battle Creek, Mich., maker of Frosted Flakes and Eggo waffles, became the latest big packaged-food producer to adopt the financial tool known as zero-base budgeting to try to slash costs amid weak demand and the strong U.S. dollar's squeeze on overseas sales.

In all for the period ended Jan. 2, the company reported a loss of $41 million, or 12 cents a share, compared with a loss of $293 million, or 82 cents a share, a year earlier.

Selling, general and administrative expenses fell 22% to $1 billion.

Excluding mark-to-market costs and restructuring charges, per-share earnings were 79 cents. Analysts polled by Thomson Reuters had expected 74 cents a share.

Revenue fell 11% to $3.14 billion, below the $3.16 billion analysts had expected. Excluding currency swings, core sales rose 4.2%.

In the North America division, sales fell 8%, or 0.4% on a comparable basis and excluding currency impacts.

Kellogg said its U.S. breakfast division improved, helped by improving cereal sales, though the U.S. snacks business logged a 1.9% decline in comparable sales.

In its international division, growth in snacks such as Pringles helped drive 1.6% core sales growth in Europe. Sales in the Asia Pacific business increased 3.3% on a comparable basis in the quarter.

Comparable sales in Latin America jumped 45.3% because of Kellogg's Venezuelan business. That business experienced significant inflation in the second half of the year, impacting year-over-year growth.

The company backed its guidance for the year.

Write to Chelsey Dulaney at [e-mail]

(END) Dow Jones Newswires

February 11, 2016 09:35 ET (14:35 GMT)

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