Kellogg: Analysts Expect Sluggish 3Q17 Results
Analysts anticipate sluggish quarter
Kellogg (K) is set to announce its 3Q17 results on October 31, and analysts expect the company’s sales and earnings results to underperform. Analysts project Kellogg’s sales and EPS (earnings per share) to fall on a YoY (year-over-year) basis. The company’s continued volume declines in North America and increased competitive activity could hurt its sales and profitability.
Kellogg’s struggles in the US (SPY) haven’t abated, which is evident through lower volumes and sales. Analysts opine that the sluggish industry trend may not dissipate in the near term and could affect the financials of the packaged food manufacturers. Stiff competition among retailers is expected to squeeze margins for packaged food manufacturers.
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Kellogg has reported tepid sales driven by lower volumes, and its management expects its top line to remain subdued in fiscal 2017. However, its 2H17 results are projected to benefit from innovation and Pringles’ improved performance in Europe.
Higher pricing and increased focus on generating productivity and cost savings are expected to boost margins.
Kellogg stock underperforms benchmark index
Reduced product demand and increased competition have softened the prospects of stocks of packaged food manufacturing companies.
Kellogg stock has fallen 16.6% on a year-to-date basis and has underperformed the S&P 500 (SPX-INDEX), which rose 15.0% on October 20, 2017.