Kellogg plunges cost in 18 years as cereal maker trims forecast | Fin24
  • Growing Demand

    Automaker Ford says it will be adding 1 200 new jobs and a third shift at its Pretoria assembly plant.

  • 'Deeply Upsetting'

    Dan Matjila, the former CEO of the Public Investment Corporation, has denied receiving a R5m bribe.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.


Kellogg plunges cost in 18 years as cereal maker trims forecast

Oct 31 2018 16:16
Leslie Patton, Bloomberg

Kellogg shares plunged the most intraday since 2000 after the company cut its profit forecast and reported a decline in US breakfast foods - underscoring the difficult road that packaged food companies are facing as consumer tastes change.

Key Insights

The company assured investors that cereal sales - an area of concern - are turning around. The performance, however, was held back by a June recall of Honey Smacks. Kellogg is trying to boost sales of healthier cereals as consumer preferences shift.

Kellogg cut its full-year profit forecast as it increases investment. Chief Executive Officer Steve Cahillane said higher spending on brands and new pack formats are leading the company to sales growth. Higher distribution and transportation costs also had an impact. The company said it was offsetting these with productivity improvements.

Market Reaction

The shares fell as much as 9.6% to $64.95, erasing the stock’s 5.7% advance this year through Tuesday’s close. The drop was the most intraday since 2000.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER



Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...