Kellogg Co on Thursday forecast a smaller drop in annual profit and raised the lower end of its sales outlook on the back of consistent price hikes and resilient demand for its cereals and snacks.
Shares of the Michigan-based company rose marginally in premarket trading after the Corn Flakes maker beat market expectations for first-quarter revenue and profit.
Kellogg, like other global packaged food makers, has been using its brand power to steadily raise product prices over the past year to counter spiralling costs of ingredients amid a cost-of-living crisis.
Meanwhile demand, especially for Kellogg's pricier cereals, has seen little pushback as shoppers have refrained from trading down to cheaper alternatives and are still willing to pay more for their favourite snack brands.
However, organic volumes declined by 1.9% in the first quarter, while overall prices rose 15.6%.
The company had posted a 0.6% rise in volumes in the fourth quarter.
Full-Year Adjusted Profit
Kellogg expects its full-year adjusted profit per share to fall between 1% and 3%, compared with the prior forecast for a decline of 2% to 4%.
The Corn Flakes maker sees organic net sales growth between 6% and 7% in 2023, against earlier forecast of 5% to 7% growth.
Net sales in the first quarter rose 10.4% to $4.05 billion, beating analysts' estimate of $3.95 billion, according to Refinitiv IBES data.
Excluding items, Kellogg earned $1.10 per share, topping estimates of 99 cents.