Kellanova Reports Sustained Growth in Organic Net Sales Despite Pressured Profit Margins; EPS Exceeds Internal Forecasts

Reuters
Jul 31
Kellanova Reports Sustained Growth in Organic Net Sales Despite Pressured Profit Margins; EPS Exceeds Internal Forecasts

Kellanova reported its second-quarter results, highlighting sustained growth in organic net sales, driven primarily by strong volume and pricing growth in its noodles businesses in Africa. This growth more than compensated for continued softness in the snacks, cereal, and frozen foods categories in other regions. The company's profit margins were under pressure due to higher costs and an adverse business mix. However, Kellanova's focus on productivity and expense discipline allowed it to surpass its internal expectations for adjusted operating profit and earnings per share. The company emphasized that these non-GAAP financial measures aim to provide a consistent comparison of profitability and net sales performance. Capital expenditure for the quarter stood at $324 million, reflecting an increase from the previous year due to timing differences. As a result, the free cash flow was reported at $(39) million year-to-date, aligning with internal forecasts despite a decrease from the previous period. Kellanova continues to focus on initiatives to drive net sales growth and improve pricing realization and business mix impact on its overall results.

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