More after the jump.
Via CNBC:
Kellogg Co said on Thursday it will replace its chief financial officer, and the cereal, breakfast foods and snacks maker reported a 36.5 percent decline in first-quarter earnings, citing a strong U.S. dollar and higher costs.
Shares were down about 5 percent in premarket trading for the maker of Pop Tarts, Eggo Waffles, Pringles snacks and a wide range of cereals including Rice Krispies and Froot Loops.
Battle Creek, Michigan-based Kellogg said CFO Fareed Khan will be replaced on July 1 by Amit Banati, who heads the company’s Asia Pacific, Africa and Middle East business.
In addition to the stronger dollar, quarterly earnings were hit by higher spending on divestitures, transportation and commodities costs. Excluding items, Kellogg’s results beat analyst estimates.
Packaged food companies have struggled to grow for years as consumers have shifted to healthier foods and trendier upstart brands. Intense pricing pressure has hurt sales too, as grocery stores compete aggressively against Amazon.com Inc.The stock is off 4% on the news. Over the last couple years Kellogg is down 19.4% while the S&P 500 is up 22.3%. General Mills is down 8.9% over the same period.
Foreign exchange fluctuations and rising commodity and transportation costs have recently eaten into profits across the industry....MUCH MORE
Over the last five years the comparison to the broader market is even worse, S&P 500 up 55.6% General Mills and Kellogg down 6% and 15% respectively. Campbell's is down 16% over five years.
Previously:
Nov. 13, 2018
Packaged Foods: The Guy Shorting Kellogg's (K; GIS; CPB)
With Campbell Soup, and their Dan Loeb-activist drama, reporting earnings tomorrow it appears the brand-name food companies are drawing attention.
We have some experience with theses things....
March 7, 2017
M&A In European Food
I'm not sure that consumer packaged goods is the area to be in, at least not in the U.S. and not based on names like Kellogg or General Mills.Sept. 7, 2018
For a quarter-century those manufacturers ratcheted prices as though they were tobacco companies but people find it easier to give up their Cheerios than their cigarettes.
The managements milked that approach for pretty much all it was worth so, as operating entities, they aren't all that attractive but someone will decide the only thing left to do is to asset strip or dividend recap the life out of the former cash cows.
Top o'the market to ya....
Packaged Goods: So, What's New at Campbell Soup? (CPB)
August 30
Packaged Goods: ""Why 149 year-old Campbell Soup is at a crossroads" (CPB)
May 18, 2018
More Trouble In U.S. Packaged Food: Campbell Soup Down 12% (CPB; GIS; K)
For the last couple years we've been using Kellogg and General Mills as proxies for the group...
May 3
The Disaster That Is American Packaged Food (K; GIS)
Not talking nutrition here, just shareholder wealth destruction.The David Says Eat More Packaged Food (and short the stocks)
We've been posting on the profit potential on the short side for the last couple years and things have only gotten worse for the former giants over the last few months:...
Packaged Goods: "...America's Venerable Food Brands Are Struggling"
Nine of the World's Biggest Packaged Food Companies Have Launched Venture Capital Units
"Hungry for Investment: Big Food Races Toward Startups"
Dealflow: "New Investors Flock To Food"
And many more. Use the 'Search blog' box if interested.
