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Kellogg's (K) Q4 Earnings & Revenues Top Estimates, Down Y/Y
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Kellogg Company (K - Free Report) delivered fourth-quarter 2021 results, with the top and the bottom line beating the Zacks Consensus Estimate. However, net sales and earnings declined year over year. During the quarter, Kellogg witnessed escalated cost inflation, global bottlenecks and shortages along with a labor strike at its U.S. cereal facilities. That said, favorable price/mix and momentum across snacks and emerging markets offered respite.
Quarter in Detail
Adjusted earnings of 83 cents per share declined 3.5% (same at constant currency or cc) year over year. Nevertheless, the bottom line exceeded the Zacks Consensus Estimate of 79 cents.
The company reported net sales of $3,421 million, which declined 1.3% year on year but surpassed the consensus mark of $3,401.5 million. Net sales were affected by unfavorable currency rates and the lapping of the year-ago quarter’s additional shipping week. These were somewhat offset by favorable piece/mix. Organic net sales increased 5.2%.
The adjusted operating profit fell 11.9% to $361 million, while the same declined 11.4% to $363 million at cc.
Sales in the North America segment amounted to $1,976 million, declining nearly 3% year over year. The downside was caused by the adverse impact of supply disruptions, labor strike and lapping of the year-ago quarter’s additional shipping week. These were somewhat offset by solid price/mix, rebound in away-from-home channels and momentum in snacks. Net sales rose 4% on an organic basis.
Revenues in the Europe segment totaled $569 million, down almost 6% year on year, thanks to unfavorable currency impacts and the lapping of the year-ago quarter’s additional shipping week. These were somewhat offset by favorable price/mix. Organic net sales fell by less than 1%.
Revenues in Latin America totaled $243 million, up almost 6% year on year, courtesy of solid price realization and momentum in Pringles consumption across Mexico and Brazil. Unfavorable currency rates and cycling of the year-ago quarter’s solid volume growth were a drag. Organic sales ascended almost 9%.
Revenues in the Asia Pacific, the Middle East & Africa segment totaled $632 million, rising nearly 7% year over year, driven by robust price/mix growth and broad-based consumption growth momentum. Organic sales in the segment increased 15%.
Other Financials
Kellogg ended the reported quarter with cash and cash equivalents of $286 million, long-term debt of $6,262 million and total equity of $4,215 million. The company generated cash from operating activities of $1,701 million in 2021.
Net cash provided by operating activities is likely to be $1.7-$1.8 billion in 2022, while cash flow is estimated to be $1.1-$1.2 billion. The company expects to incur a capital expenditure of nearly $0.6 billion in 2022.
Image Source: Zacks Investment Research
2022 Guidance
Organic sales growth in 2022 is estimated to be up nearly 3%, driven by price/mix growth. The adjusted operating profit is expected to rise 1-2% at cc. Management expects adjusted earnings per share (EPS) to grow 1-2% at cc
The company’s 2022 view takes into account the ongoing economy-wide supply hurdles, leftover impact of the U.S. cereal labor strike and fire along with escalated cost inflation.
Kellogg currently carries a Zacks Rank #3 (Hold). Shares of the company have declined 2.6% in the past three months against the industry’s growth of 2.9%.
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Helen of Troy, a designer, developer, marketer, importer and distributor, sports a Zacks Rank #1 (Strong Buy) at present. Shares of Helen of Troy have dropped 12.7% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Helen of Troy’s current financial-year sales and EPS suggests growth of 0.8% and 0.6%, respectively, from the year-ago reported number. HELE has a trailing four-quarter earnings surprise of 19.1%, on average.
Flowers Foods, which produces and markets packaged bakery products, carries a Zacks Rank #2 (Buy). Shares of Flowers Foods have moved up10.9% in the past three months.
The Zacks Consensus Estimate for Flowers Foods' 2022 financial year sales suggests growth of 2.1% from the year-ago reported number. FLO has a trailing four-quarter earnings surprise of 15.4%, on average.
Medifast, the manufacturer and distributor of weight loss, weight management, healthy living products and other consumable health and nutritional products, currently carries a Zacks Rank #2. Shares of Medifast have dropped 13.4% in the past three months.
The Zacks Consensus Estimate for Medifast’s current financial year sales and EPS suggests growth of about 63% and 49.3%, respectively, from the year-ago reported figure. MED has a trailing four-quarter earnings surprise of 17.3%, on average.
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Kellogg's (K) Q4 Earnings & Revenues Top Estimates, Down Y/Y
Kellogg Company (K - Free Report) delivered fourth-quarter 2021 results, with the top and the bottom line beating the Zacks Consensus Estimate. However, net sales and earnings declined year over year. During the quarter, Kellogg witnessed escalated cost inflation, global bottlenecks and shortages along with a labor strike at its U.S. cereal facilities. That said, favorable price/mix and momentum across snacks and emerging markets offered respite.
Quarter in Detail
Adjusted earnings of 83 cents per share declined 3.5% (same at constant currency or cc) year over year. Nevertheless, the bottom line exceeded the Zacks Consensus Estimate of 79 cents.
The company reported net sales of $3,421 million, which declined 1.3% year on year but surpassed the consensus mark of $3,401.5 million. Net sales were affected by unfavorable currency rates and the lapping of the year-ago quarter’s additional shipping week. These were somewhat offset by favorable piece/mix. Organic net sales increased 5.2%.
The adjusted operating profit fell 11.9% to $361 million, while the same declined 11.4% to $363 million at cc.
Kellogg Company Price and Consensus
Kellogg Company price-consensus-chart | Kellogg Company Quote
Segment Discussion
Sales in the North America segment amounted to $1,976 million, declining nearly 3% year over year. The downside was caused by the adverse impact of supply disruptions, labor strike and lapping of the year-ago quarter’s additional shipping week. These were somewhat offset by solid price/mix, rebound in away-from-home channels and momentum in snacks. Net sales rose 4% on an organic basis.
Revenues in the Europe segment totaled $569 million, down almost 6% year on year, thanks to unfavorable currency impacts and the lapping of the year-ago quarter’s additional shipping week. These were somewhat offset by favorable price/mix. Organic net sales fell by less than 1%.
Revenues in Latin America totaled $243 million, up almost 6% year on year, courtesy of solid price realization and momentum in Pringles consumption across Mexico and Brazil. Unfavorable currency rates and cycling of the year-ago quarter’s solid volume growth were a drag. Organic sales ascended almost 9%.
Revenues in the Asia Pacific, the Middle East & Africa segment totaled $632 million, rising nearly 7% year over year, driven by robust price/mix growth and broad-based consumption growth momentum. Organic sales in the segment increased 15%.
Other Financials
Kellogg ended the reported quarter with cash and cash equivalents of $286 million, long-term debt of $6,262 million and total equity of $4,215 million. The company generated cash from operating activities of $1,701 million in 2021.
Net cash provided by operating activities is likely to be $1.7-$1.8 billion in 2022, while cash flow is estimated to be $1.1-$1.2 billion. The company expects to incur a capital expenditure of nearly $0.6 billion in 2022.
2022 Guidance
Organic sales growth in 2022 is estimated to be up nearly 3%, driven by price/mix growth. The adjusted operating profit is expected to rise 1-2% at cc. Management expects adjusted earnings per share (EPS) to grow 1-2% at cc
The company’s 2022 view takes into account the ongoing economy-wide supply hurdles, leftover impact of the U.S. cereal labor strike and fire along with escalated cost inflation.
Kellogg currently carries a Zacks Rank #3 (Hold). Shares of the company have declined 2.6% in the past three months against the industry’s growth of 2.9%.
Looking for Solid Consumer Staple Stocks? Check These
Some better-ranked stocks are Helen of Troy (HELE - Free Report) , Flowers Foods (FLO - Free Report) and Medifast, Inc. (MED - Free Report)
Helen of Troy, a designer, developer, marketer, importer and distributor, sports a Zacks Rank #1 (Strong Buy) at present. Shares of Helen of Troy have dropped 12.7% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Helen of Troy’s current financial-year sales and EPS suggests growth of 0.8% and 0.6%, respectively, from the year-ago reported number. HELE has a trailing four-quarter earnings surprise of 19.1%, on average.
Flowers Foods, which produces and markets packaged bakery products, carries a Zacks Rank #2 (Buy). Shares of Flowers Foods have moved up10.9% in the past three months.
The Zacks Consensus Estimate for Flowers Foods' 2022 financial year sales suggests growth of 2.1% from the year-ago reported number. FLO has a trailing four-quarter earnings surprise of 15.4%, on average.
Medifast, the manufacturer and distributor of weight loss, weight management, healthy living products and other consumable health and nutritional products, currently carries a Zacks Rank #2. Shares of Medifast have dropped 13.4% in the past three months.
The Zacks Consensus Estimate for Medifast’s current financial year sales and EPS suggests growth of about 63% and 49.3%, respectively, from the year-ago reported figure. MED has a trailing four-quarter earnings surprise of 17.3%, on average.