Why Kellenova Stock Jumped Despite The Food Company Missing Earnings Estimates

Shares Hit Their Highest Level Since Last August

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published May 02, 2024
Kellanova Pop-Tarts in a store

 Tiffany Hagler-Geard / Bloomberg via Getty Images

Key Takeaways

  • Kellanova, the snacks and breakfast food company spun off of Kellogg in 2023, beat first-quarter revenue estimates, although profit came up short of analysts' forecasts.
  • CEO Steve Cahillane said the company faces challenging macroeconomic and industry conditions, but that he sees a recovery ahead.
  • Sales for Kellanova rose in North America and Latin America, but fell in Europe and Asia/Pacific, Middle East, and Africa.
  • Kellanova shares jumped to their highest level since last August.

Kellanova (K) shares moved sharply higher Friday as the snack and breakfast food company spun off of Kellogg (KLG) said its market is bouncing back from a tough economic environment.

The maker of Pringles, Pop-Tarts, Cheez-It crackers, and Eggo waffles reported first-quarter revenue fell 4.3% to $3.20 billion, but that exceeded estimates. Adjusted earnings per share (EPS) of 78 cents missed forecasts.

Sales in North America were little changed at $1.69 billion. They rose 11% to $314 million in Latin America. Sales dropped 1% in Europe to $599 million, and they plunged 22% to $600 million in Asia/Pacific, Middle East, and Africa.

Company Affirms Full-Year Guidance

CEO Steve Cahillane said the performance at the company spun off from Kellogg in October 2023 was solid, even as the company faced “challenging macroeconomic and industry conditions.” However, he explained that Kellanova is "seeing tangible signs that this year’s return to full commercial activity is taking hold in the marketplace and beginning to restore volume and share.”

Kellanova reiterated its full-year guidance of adjusted EPS in a range of $3.55 to $3.65.

The "strong start to the year, along with improving in-market performance, provides added confidence in the company's full-year outlook, which it is affirming today," the company said in the earnings press release.

Kellanova shares were up 7.2% at $61.06 at around 3:30 p.m. ET, trading at their highest levels since last August.

Kellanova stock chart for the past 12 months

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  1. Kellanova. "Kellanova Reports Strong First-Quarter Results, Reaffirms Full-Year Outlook."

  2. Kellanova. "About Spin-Off."

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