Kellogg reports growth in U.S. cereal business, nets 4Q loss
Kellogg Co. said its cereal business improved in the fourth quarter, leading to optimism for growth in the category despite overall sales declines during the period.
Despite the U.S. Morning Foods business taking an overall loss in 2015, the Battle Creek-based company reported the segment posted an increase of 1.5 percent for the quarter. The company attributes the increase to diversifying the business with innovations in its Pop-Tarts, Greek yogurt and Special K cereal brands, among other areas.
Kellogg Chairman and CEO John Bryant said there's no question additional investments in the company's sales force as part of "Project K," a cost-cutting measure launched in 2014, helped boost the company's cereal business.
Bryant said the company expects its cereal business to grow slightly in 2016; Bryant had earlier said he anticipated flat sales for the category.
For the fourth quarter, the company reported a net loss of $41 million, or 12 cents per share. The company's earnings, adjusted for non-recurring costs, came to 79 cents per share for the quarter. That figure exceeded Wall Street expectations as Zacks Investment Research anticipated the company's earnings at 75 cents per share, according to the Associated Press.
Kellogg's earned $614 million on a revenue of $13.5 billion in 2015, the company said Thursday.
“Our results in 2015 met or exceeded our initial expectations," Bryant said in a news release. "We saw good growth in many of our businesses, and importantly, trends continued to improve in the U.S. Cereal business. We're very pleased with the foundation that we've built.
"We are committed to achieving our long-term goals for growth in 2016, supported by our increasing momentum and unprecedented productivity programs."
The company made headlines in 2015 for its $450 million investment for a 50 percent stake in West African food distributor, Multipro, as well as an $125 million acquisition of the majority interest in Egypt's Bisco Misr, an Egyptian biscuits company, and its $50 million purchase of Egypt's top food company, Mass Food Group.
Kellogg Co. expanding in Africa
Outside of acquisitions, the company took on a number of initiatives.
Among them: The announcement of plans to remove artificial colors and flavors in Kellogg's branded cereals, snack bars and Eggo frozen foods by the end of 2018; plans to expand the company's animal welfare efforts by sourcing only cage-free eggs and eliminating gestation stalls from its pork supply chain by the end of 2025; and implementing a long-term goal of cutting greenhouse gas emissions by 65 percent by 2050.
The Associated Press contributed to this report. Contact Dillon Davis at 269-966-0698 or dwdavis@battlecreekenquirer.com. Follow him on Twitter: @DillonDavis