- change ups
Overall net sales up nicely in Kellogg's 3Q
Kellogg Co. in Battle Creek reported third quarter net sales of $3.7 billion, an increase of 12.3 percent from the third quarter last year. Operating profit was $479 million, an increase of 3.2 percent.
Internal net sales increased by 2.8 percent in the quarter, but internal operating profit declined by 4.9 percent. Higher commodity costs, last month’s product recall, and a high single-digit increase in brand-building investment all had an impact on operating profit, according to the company.
Internal results exclude the effects of foreign currency transactions, the results from the recently-acquired Pringles business, integration costs and divestitures.
Third quarter net earnings were $296 million, or 82 cents per diluted share, compared to 80 cents per diluted share in the third quarter of 2011. This quarter’s reported earnings per share included approximately 4 cents of integration costs related to the acquisition of Pringles. The cost of the recall last month of Mini-Wheats, due to metal fragments found in some boxes, was approximately 6 cents per share. However, that cost was offset by better-than-expected performance from the Pringles business and certain below-the-line items.
“We’re pleased with the improving trends in our underlying performance, which is in line with our expectations and includes strong revenue growth in many of our businesses,” said John Bryant, Kellogg’s president and chief executive officer. “We’re also pleased that the Pringles business performed better during the quarter than we had expected. While it’s early, we remain optimistic regarding the potential of this iconic brand.”