The new normal borne from the COVID-19 pandemic is still the name of the game at food giant Kellogg (K).
That is a whole lot of snacking and cereal eating by people still stuck at home.
“People are still snacking,” Kellogg CEO Steve Cahillane tells Yahoo Finance. Evidence of that: Kellogg’s Cheez It and Pringles businesses each grew sales by double digits in the most recent quarter. “People are grazing even more than they were in April, May and June.”
Those trends continued to light a fire under Kellogg’s financials.
Kellogg’s fourth quarter organic sales rose a solid 4.5%, fueled by demand for snacks and also cereal. Adjusted operating profits fell 10% from a year ago as Kellogg ramped up advertising to gain market share amidst the pandemic.
Shares rose slightly in Thursday trading.
Here’s how Kellogg performed compared to Wall Street estimates:
Net sales: $3.43 billion versus estimates for $3.37 billion
Diluted EPS: $0.91 versus estimates for $0.86
Kellogg joined other food companies such as General Mills and Conagra of late offering upbeat guidance for the balance of the year. The company now sees organic sales growth of 6% versus 5% growth previously. Earnings are expected to rise 2%, improved from an expected drop of 1%.
The outlook from Kellogg underscores how the pandemic continues to weigh on consumer eating choices. With infections back on the rise in the U.S. and restaurants shutting down again, the eat-from-home trend is likely here to stay for some time. And that will probably keep a bid under Kellogg’s stock, and the consumer staple sector more broadly.
Adds Cahillane, “We have elevated demand in the U.S.”
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