Kellogg's strong North American snack business offsets fourth-quarter challenges

In its fourth-quarter financial report, ended Jan. 2, Kellogg Co. (K) said its revenue declined 1.2% to $3.42 billion from $3.46 billion in the last comparable quarter. The company's earnings in the recent quarter were $433 million, or $1.26 a share, compared with $205 million, or $0.59 per share, in last year's fourth quarter. Analysts on average had expected the company to earn $0.79 a share.

For the full year 2021, Kellogg said net sales increased by about 3% year on year, driven by positive price/mix in all four regions, as well as modestly favorable foreign currency translation, which together more than offset the impact of lapping the prior fiscal year that included a 53rd week. On an organic basis, net sales increased by 3.5%, despite lapping unusually strong, pandemic-aided organic growth in 2020; this was modestly higher than company guidance.

Kellogg Co. continued to face an unusually challenging business environment in the fourth quarter, which was marked by a resurgence of COVID-19, persistent worldwide bottlenecks and shortages, and accelerating cost inflation.

Its results were also negatively impacted by the strike of approximately 1,400 union employees at the company's four U.S. cereal plants, which began in early October and ended in late December.

While working through these challenging supply conditions, Kellogg's also continued to largely offset market-driven cost inflation with productivity and revenue growth management efforts, while sustaining strong momentum in its international regions, and in its North America snacks business.