Kellogg Co said on Thursday it will replace its chief financial officer, and the cereal, breakfast foods and snacks maker reported a 36.5% decline in first-quarter earnings, citing a strong U.S. dollar and higher costs.
Shares were down about 5% 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 1 July 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.
Foreign exchange fluctuations and rising commodity and transportation costs have recently eaten into profits across the industry.
Net income attributable to Kellogg fell to $282 million, or 82 cents per share, in the quarter ended 30 March, from $444 million, or $1.27 per share, a year earlier.
Excluding items, Kellogg's earnings were $1.01 per share, topping analysts' estimates of 95 cents, according to IBES data from Refinitiv.
Net sales rose 3.6% to $3.62 billion. Kellogg's 2018 acquisition of a 50% stake in Multipro, a sales and distribution company in Nigeria and Ghana, helped drive a 60% jump in Asia, Middle East and Africa business sales.
Organic sales - excluding M&A and foreign exchange impact - rose 4% on strong sales of Pringles snacks. Sales at all Kellogg's other businesses - North America, Latin America and Europe - declined during the quarter.
In a move to focus on its core cereals and snacks business, Kellogg last month, Kellogg agreed to sell its Keebler biscuits brand and other assets to Nutella maker Ferrero for $1.3 billion.