WK Kellogg forecasts upbeat 2025 profit on cost cut efforts

WK Kellogg Co

11/02/2025 13:53

Feb 11 (Reuters) - WK Kellogg  KLG.N  forecast annual
profit above expectations on Tuesday and reported
better-than-expected earnings as the breakfast cereal maker's
efforts to clamp down on costs boosted its margins.
    Shares of the company, which makes Froot Loops and Frosted
Flakes cereals, rose about 4% in premarket trading.
    Battle Creek, Michigan-based WK Kellogg had announced a
reorganization plan in August involving plant closures,
workforce reduction and plans to streamline its supply chain by
investing in modernizing its equipment and infrastructure.
    The cost-cutting effort helped the company post an adjusted
profit of 42 cents per share for the fourth quarter ended
December 28, and beat analysts' estimates of 26 cents per share,
according to data compiled by LSEG.
    The company expects full-year net adjusted earnings before
interest, tax, depreciation and amortization (EBITDA) between
$286 million and $292 million, compared with analysts' estimate
of $283.2 million.
    The company has also had to raise prices to offset higher
raw material costs, which have in turn led to budget-strained
customers cutting back spending on packaged food such as cereal.
    The cereal maker's product pricing rose 3.8% in the quarter,
while volume slumped 5.6%. The higher prices helped the
company's margins rise to 8.9%.
    WK Kellogg's net sales fell 1.8% to $640 million in the
quarter, compared with analysts' average expectation of $641.7
million.
 

 (Reporting by Neil J Kanatt in Bengaluru; Editing by Leroy Leo)
 ((Neil.JKanatt@thomsonreuters.com;))