WK Kellogg Q2 revenue beats but stock slips on earnings miss, lowered guidance
By James Rogers
Food giant WK Kellogg reported second-quarter results before market open Tuesday
WK Kellogg Co. beat Wall Street's revenue expectations in its second-quarter results Tuesday but the food giant's shares slipped on weaker-than-expected earnings and lowered sales guidance.
Shares of WK Kellogg (KLG) were down 3.1% at 9:35 am Eastern time, compared with the S&P 500 index's SPX gain of 0.43%.
The Battle Creek, Mich.-based company reported net income of $31 million, or 36 cents a share, up from $27 million, or 32 cents a share, in the prior year's quarter. Analysts were looking for earnings of 42 cents a share.
Related: WK Kellogg revenue beats analyst estimates
Revenue fell to $672 million from $700 million in the same period last year, but was just above the FactSet consensus of $671 million.
"Our second quarter results are in line with expectations, and we are on track to achieve our full-year financial guidance despite a difficult business environment," said WK Kellogg CEO Gary Pilnick, in a statement.
The company also gave an update on its supply chain modernization effort. WK Kellogg confirmed plans to spend $450 million to $500 million on supply chain modernization. This now includes capital expenditures of up to $390 million and one-time cash restructuring and non-restructuring costs of approximately $110 million, the company said, in a statement.
Related: Why a Mars acquisition of Pringles maker and Kellogg spinoff Kellanova makes sense
WK Kellogg reaffirmed the 2024 financial guidance it gave when it reported fourth-quarter results earlier this year, which called for adjusted EBITDA growth between 3% and 5%. However, the company now expects adjusted net sales to be at the lower end of its guidance range between negative 1% and growth of 1%.
Shares of WK Kellogg are up 27.6% in 2024, outpacing the S&P 500 index's gain of 9.2%.
-James Rogers
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08-06-24 1004ET
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