Kellogg’s Q2 Earnings Preview: What to Expect

Kellogg Company

When Kellogg Company (NYSE:K) publishes its earnings for the second quarter of 2022 on August 4, the company is likely to report an increase in its top line. 

Kellogg’s Revenue Expected to Rise, Profit to Decrease

The Zacks Consensus Estimate for quarterly revenues is currently set at $3,647 million, which indicates an increase of 2.6% over the reported amount for the same quarter in the previous year.

Over the past 30 days, the Zacks Consensus Estimate for quarterly earnings has stayed steady at $1.05 per share. This is a decrease of 7.9% from the amount recorded in the same quarter of the previous year.

A year-over-year increase in revenues of 3% to $3,662.1 million is anticipated, with a corresponding decrease in earnings per share of 9.9% to $1.03 per share.

This company specializes in packaged snacks and convenience meals, and its average earnings surprise for the preceding four quarters was 12.8%. In the most recent reported quarter, Kellogg exceeded expectations concerning its earnings by 20.9%.

Factors to Consider

The EMEA region has been a source of growth and success for Kellogg. Expanding market share in categories such as snacks, cereal, and noodles has benefited sales in the region. In addition, a focus on expanding the portfolio through innovative means and strategic acquisitions is a positive sign. The increasing sales of snacks, particularly Pringles, are significantly boosting the company’s bottom line. These positive developments and measures to manage revenue growth, such as the price/mix strategy, bode well for the quarter under consideration.

However, restrictions and shortages across the economy impacted the gross margin in the most recent reported quarter, and it is expected that these issues will continue at least through the first half of the year. In addition, Kellogg’s performance in the first quarter was considerably hindered by an inadequate finished goods inventory in North American cereal due to an outbreak of fire and a labor strike in the second half of 2021. During the most recent earnings call, the company reported that it is making headway toward reviving sales and inventory in its cereal sector in North America. However, the outcomes of the operation in North America are likely to be impacted in any way that the debacle has an effect.

Featured Image: Megapixl @Bigapplestock

Please See Disclaimer

About the author: Stephanie Bedard-Chateauneuf has over four years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on consumer stocks, cannabis stocks, tech stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.