Kellogg's US breakfast business shrinks again

AP News
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Posted: Aug 04, 2015 8:38 AM

BATTLE CREEK, Mich. (AP) — Kellogg says its U.S. cereal division saw another decline in quarterly sales but that trends in the category were improving.

The maker of Frosted Flakes, Froot Loops and Kashi is trying to revamp the marketing for its cereals as Americans reach for other breakfast options, like Greek yogurt and fast food. One strategy has been trying to reposition Special K to be more in line with changing health trends, which Kellogg CEO John Bryant has said are moving away from weight loss and dieting.

For the quarter, Kellogg Co. said sales in its flagship U.S. Morning Foods segment fell 2.3 percent when stripping out the impact of currency exchange rates and other one-time factors.

Its international division was hit by unfavorable exchange rates. That also hurt its performance for the quarter, dragging total sales down by 5 percent to $3.5 billion. Analysts expected $3.47 billion, according to Zacks Investment Research.

Profit fell to $223 million, or 63 cents per share. The results included upfront costs associated with a cost-cutting program called Project K. Adjusted for non-recurring costs, earnings came to 92 cents per share. Analysts expected 91 cents per share, according to Zacks Investment Research.

Shares of Kellogg, based in Battle Creek, Michigan, dipped slightly to $66.07.