Kellogg (K) Names Businesses to be Formed After Planned Split
Kellogg Company K has unveiled the names of its companies, which will be created through its planned split that is likely to be concluded by 2023-end. The two separate entities will be focused on global snacking and North American cereal.
The global snacking, international cereal and noodles, plant-based foods and North American frozen breakfast business will be called Kellanova, while the North American cereal business will be termed WK Kellogg Co. However, the company will retain the “Kellogg” brand on the packaging of both companies worldwide.
Kellanova will house iconic snacking brands such as Pringles, Cheez-It, Pop-Tarts, Kellogg's Rice Krispies Treats, MorningStar Farms, RXBAR, and Eggo, among others. It will also include some international cereal brands like Kellogg's, Frosties, Zucaritas, Special K, and Crunchy Nut, to name a few.
WK Kellogg Co will flaunt a portfolio of renowned, world-class brands like Kellogg's, Frosted Flakes, Froot Loops, Mini-Wheats, Special K, Raisin Bran, Rice Krispies, Corn Flakes, Kashi and Bear Naked.
Kellogg Company Price, Consensus and EPS Surprise
Kellogg Company price-consensus-eps-surprise-chart | Kellogg Company Quote
Kellogg delivered impressive fourth-quarter 2022 results, with the top and bottom lines beating the Zacks Consensus Estimate and increasing year over year. Net sales growth was backed by revenue growth management actions, momentum in snacks and emerging markets and continued recovery in the North American cereal business.
Kellogg reported adjusted earnings of 94 cents per share, which increased 13.3% year over year. On a constant currency or cc basis, adjusted earnings per share (EPS) increased 16.9% to 97 cents a share. The company reported net sales of $3,832 million, which rose 12%. Net sales growth was backed by a favorable price/mix in every region and continued momentum in snacks and emerging markets. Organic net sales (excluding currency impact) increased 16%.
In its last-earnings call, Kellogg highlighted that it expects price realization, momentum in its categories and solid brand plans to contribute to its net sales growth in 2023. Organic net sales growth in 2023 is estimated to be up 5-7%, led by price/mix growth and sustained momentum in snacks and emerging markets. The adjusted operating profit is expected to rise 7-9% at cc, with margins stabilizing amid persistent cost inflation.
We believe that the abovementioned split is likely to help the company sharpen its focus and resources on individual areas and fuel growth. The Zacks Rank #3 (Hold) stock has rallied nearly 7% in the past year compared with the industry’s growth of 1.2%.
Solid Staple Stocks
Some better-ranked consumer staple stocks are Post Holdings POST, General Mills GIS and Lamb Weston LW.
Post Holdings, which operates as a consumer-packaged goods company, currently sports a Zacks Rank #1 (Strong Buy). POST has a trailing four-quarter earnings surprise of 34.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year EPS suggests an increase of 111.3% from the year-ago reported number.
General Mills, a branded consumer foods company, currently carries a Zacks Rank #2 (Buy). GIS has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for General Mills’ current fiscal-year sales and earnings suggests growth of 5% and 6.1%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, a frozen potato product company, currently carries a Zacks Rank #2. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and EPS suggests an increase of 19.3% and 89.9%, respectively, from the year-ago reported number.
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