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Can Kellogg's Deploy for Growth Strategy Help Revive Stock?
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Kellogg Company (K - Free Report) unveiled that it is holding a meeting to provide updates on its Deploy for Growth strategy. As part of the meeting, the company plans to outline the progress on this strategy, in terms of the related investments and actions undertaken to boost net sales in 2019.
The company is focused on driving growth through reshaping portfolio. In this regard, Kellogg’s strategic buyouts, and investments in core consumer divisions and emerging markets like Parati in Brazil, RX in the United States and Multipro in West Africa are yielding favorable results.
Further, the company is committed toward efficient resource allocation by shifting focus to core areas with higher growth potential. To this end, Kellogg stated that it is exploring the divestiture of its cookies and fruit snacks businesses, which include brands like Keebler and Stretch Island. Industry experts believe that consumers’ shifting preference for healthier options, and pricing pressure stemming from competition from online retailers such as Amazon (AMZN - Free Report) have been weighing on the company. The sale of cookies and fruit snacks businesses is expected to help Kellogg concentrate more on other profitable areas.
Additionally, Kellogg is planning to restructure its business in the North America region to enhance focus on individual categories, and expand scale across sales, supply chain and other operations. This will help the company prioritize resources more efficiently and also speed up its decision-making process. In the meeting, Kellogg will also highlight its plans for 2019, including planned investments toward Deploy for Growth strategy.
Well, Kellogg’s Deploy for Growth plan includes strategies like building superior brands, and enhancing services and store experience among others, which are aimed at driving top-line advancement. For now, Kellogg expects organic sales to keep growing in 2019, wherein it anticipates continued brand investments. These investments are likely to dent constant currency (cc) adjusted operating profit growth.
Incidentally, such investments weighed on the company’s operating profit in the third quarter of 2018. Also, Kellogg lowered its outlook for 2018 as it expects higher investments, mix shifts and costs related to expansion of co-packed pack formats to dent fourth-quarter operating profit. Adjusted operating profit growth (at cc) is now anticipated to remain roughly flat year over year compared with 5-7% growth forecasted earlier. Consequently, the company trimmed its adjusted earnings growth view to 7-8% (at cc) from 11-13% projected earlier.
These factors seem to have hurt investors’ confidence in this Zacks Rank #4 (Sell) stock that has lost 11.3% in the past three months compared with the industry’s decline of 1.7%. Nonetheless, we expect Kellogg’s Deploy for Growth strategy to help regain investors’ confidence.
McCormick & Company, Incorporated (MKC - Free Report) has long-term earnings per share growth rate of 9% and a Zacks Rank #2 (Buy).
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
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Can Kellogg's Deploy for Growth Strategy Help Revive Stock?
Kellogg Company (K - Free Report) unveiled that it is holding a meeting to provide updates on its Deploy for Growth strategy. As part of the meeting, the company plans to outline the progress on this strategy, in terms of the related investments and actions undertaken to boost net sales in 2019.
The company is focused on driving growth through reshaping portfolio. In this regard, Kellogg’s strategic buyouts, and investments in core consumer divisions and emerging markets like Parati in Brazil, RX in the United States and Multipro in West Africa are yielding favorable results.
Further, the company is committed toward efficient resource allocation by shifting focus to core areas with higher growth potential. To this end, Kellogg stated that it is exploring the divestiture of its cookies and fruit snacks businesses, which include brands like Keebler and Stretch Island. Industry experts believe that consumers’ shifting preference for healthier options, and pricing pressure stemming from competition from online retailers such as Amazon (AMZN - Free Report) have been weighing on the company. The sale of cookies and fruit snacks businesses is expected to help Kellogg concentrate more on other profitable areas.
Additionally, Kellogg is planning to restructure its business in the North America region to enhance focus on individual categories, and expand scale across sales, supply chain and other operations. This will help the company prioritize resources more efficiently and also speed up its decision-making process. In the meeting, Kellogg will also highlight its plans for 2019, including planned investments toward Deploy for Growth strategy.
Well, Kellogg’s Deploy for Growth plan includes strategies like building superior brands, and enhancing services and store experience among others, which are aimed at driving top-line advancement. For now, Kellogg expects organic sales to keep growing in 2019, wherein it anticipates continued brand investments. These investments are likely to dent constant currency (cc) adjusted operating profit growth.
Incidentally, such investments weighed on the company’s operating profit in the third quarter of 2018. Also, Kellogg lowered its outlook for 2018 as it expects higher investments, mix shifts and costs related to expansion of co-packed pack formats to dent fourth-quarter operating profit. Adjusted operating profit growth (at cc) is now anticipated to remain roughly flat year over year compared with 5-7% growth forecasted earlier. Consequently, the company trimmed its adjusted earnings growth view to 7-8% (at cc) from 11-13% projected earlier.
These factors seem to have hurt investors’ confidence in this Zacks Rank #4 (Sell) stock that has lost 11.3% in the past three months compared with the industry’s decline of 1.7%. Nonetheless, we expect Kellogg’s Deploy for Growth strategy to help regain investors’ confidence.
Check These Solid Food Stocks
Chefs’ Warehouse (CHEF - Free Report) , with long-term earnings per share growth rate of 19%, carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
McCormick & Company, Incorporated (MKC - Free Report) has long-term earnings per share growth rate of 9% and a Zacks Rank #2 (Buy).
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>