Kellogg Company (K) Bundle
A Brief History of Kellanova
Company Overview
Kellanova, formerly known as Kellogg Company, has undergone significant changes leading up to 2024. The company is a major player in the global food industry, focusing on cereal and snacks.
Financial Performance
As of the year-to-date period ending September 28, 2024, Kellanova reported net sales of $3.233 billion, a slight increase of 1.1% compared to $3.255 billion in the same period of 2023. The organic net sales growth was 6.1% when adjusting for foreign currency effects and divestitures.
| Segment | Net Sales (in millions) | Operating Profit (in millions) |
|---|---|---|
| North America | $1,673 | $971 |
| Europe | $660 | $240 |
| Latin America | $311 | $102 |
| AMEA | $590 | $200 |
| Corporate | $(1) | $(171) |
| Total | $3,233 | $1,342 |
Income and Earnings
Kellanova's net income for the year-to-date period was $988 million, resulting in a diluted earnings per share (EPS) of $2.83. This reflects an increase from $934 million and an EPS of $2.68 in the prior year period.
| Metric | 2024 | 2023 |
|---|---|---|
| Net Income (in millions) | $988 | $934 |
| EPS (diluted) | $2.83 | $2.68 |
Cash Flow and Dividends
For the year-to-date period ended September 28, 2024, Kellanova generated $1.293 billion in net cash from operating activities, down from $1.400 billion in the previous year. The company declared dividends totaling $580 million, compared to $610 million in the prior year, influenced by the spin-off of WK Kellogg Co.
| Cash Flow Activity | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Operating Activities | $1,293 | $1,400 |
| Investing Activities | $(589) | $(472) |
| Financing Activities | $(417) | $(120) |
Debt and Equity
As of September 28, 2024, Kellanova's total debt was $5.853 billion, with net debt standing at $5.284 billion after accounting for cash and cash equivalents of $569 million. The company maintains a robust equity position with total equity reported at $3.758 billion.
| Debt and Equity Metrics | Amount (in millions) |
|---|---|
| Total Debt | $5,853 |
| Cash and Cash Equivalents | $569 |
| Net Debt | $5,284 |
| Total Equity | $3,758 |
Market Position and Strategic Developments
Kellanova's strategic focus has included optimizing its supply chain and divesting non-core operations. The company announced a restructuring initiative aimed at enhancing productivity in its North American frozen supply chain, with an expected cumulative pretax charge of $50 million.
Overall, Kellanova's performance in 2024 highlights its resilience amid market fluctuations, with a continued emphasis on growth through strategic investments and operational efficiencies.
A Who Owns Kellogg Company (K)
Major Shareholders
As of 2024, Kellogg Company (K) has a diverse shareholder base comprising institutional investors, mutual funds, and individual shareholders. The largest shareholders include:
| Shareholder | Ownership Percentage |
|---|---|
| The Vanguard Group, Inc. | 8.67% |
| BlackRock, Inc. | 8.15% |
| Wellington Management Company, LLP | 5.14% |
| State Street Corporation | 4.20% |
| Invesco Ltd. | 3.85% |
Institutional Ownership
Institutional investors play a significant role in Kellogg's ownership structure, holding approximately 81.3% of the total shares. This figure includes a mix of hedge funds, pension funds, and other investment entities.
Insider Ownership
Insider ownership, which includes executives and board members, is relatively modest. As of 2024, insiders own approximately 0.9% of the company’s shares.
Stock Performance
The stock performance of Kellogg Company has shown resilience, with a year-to-date increase of approximately 12% as of October 2024. The current stock price is around $72.50, reflecting a market capitalization of approximately $24 billion.
Recent Changes in Ownership
In 2024, there have been notable changes in the shareholder structure with increased stakes from large institutional investors, particularly The Vanguard Group and BlackRock, indicating confidence in Kellogg's strategic direction.
Voting Rights
Each common share of Kellogg Company provides one vote, allowing shareholders to participate in key decisions, including board elections and major corporate actions.
Dividends
Kellogg Company continues to reward its shareholders with dividends. The annual dividend declared for 2024 stands at $2.08 per share, reflecting a yield of approximately 2.87% based on the current stock price.
Future Outlook
As Kellogg Company navigates its restructuring and growth strategies, analysts predict continued interest from institutional investors, potentially leading to further shifts in ownership dynamics over the coming quarters.
Kellogg Company (K) Mission Statement
Mission Statement Overview
Kellogg Company's mission statement emphasizes its commitment to enriching and nourishing the world through food. The company aims to provide delicious and nutritious products that cater to the diverse needs of consumers globally.
Strategic Goals Aligned with Mission
As of 2024, Kellogg's strategic goals focus on sustainability, innovation, and community engagement. The firm aims to achieve a more sustainable supply chain while enhancing product offerings through innovative solutions that meet evolving consumer preferences.
Financial Performance Summary
For the third quarter ended September 28, 2024, Kellogg reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $3,233 million | $3,255 million | -0.7% |
| Operating Profit | $456 million | $414 million | 10% |
| Net Income | $367 million | $269 million | 36.5% |
| Diluted EPS | $1.05 | $0.57 | 84% |
Market Position and Strategy
Kellogg is focused on expanding its market presence in key segments such as snacks, cereals, and plant-based products. The company is actively pursuing international growth, particularly in the AMEA (Asia, Middle East, and Africa) regions, despite facing challenges related to foreign currency impacts.
Recent Developments
As part of its ongoing strategic initiatives, Kellogg has entered into a merger agreement with Mars, which is expected to enhance its operational capabilities and market reach. This merger is anticipated to provide significant synergies and accelerate growth across various product lines.
Community and Sustainability Initiatives
Kellogg's mission also encompasses a strong commitment to community engagement and sustainability. The company aims to reduce its environmental footprint through improved sourcing practices and waste reduction initiatives.
Stock Performance
As of recent trading sessions in 2024, Kellogg's stock (K) has demonstrated resilience, reflecting investor confidence in its strategic direction and financial health. The stock closed at approximately $75.50, representing a year-to-date increase of around 15%.
Conclusion on Mission Alignment
Kellogg Company continues to align its operational and strategic objectives with its mission to nourish the world, demonstrating a balanced approach to profitability, sustainability, and community impact.
How Kellogg Company (K) Works
Company Overview
Kellogg Company, traded under the ticker symbol K, operates as a global food manufacturer, primarily known for its breakfast cereals and snacks. As of 2024, Kellogg has undergone significant structural changes following the spin-off of its North American business.
Financial Performance
For the third quarter ended September 28, 2024, Kellogg reported net sales of $3,233 million, down slightly from $3,255 million in the prior year. The year-to-date net sales totaled $9,625 million, compared to $9,948 million for the same period in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Net Sales | $3,233 million | $3,255 million | $9,625 million | $9,948 million |
| Cost of Goods Sold | $2,057 million | $2,145 million | $6,257 million | $6,760 million |
| Selling, General & Administrative Expenses | $720 million | $696 million | $2,026 million | $2,011 million |
| Operating Profit | $456 million | $414 million | $1,342 million | $1,177 million |
| Net Income | $367 million | $269 million | $978 million | $924 million |
Segment Performance
Kellogg's operations are segmented into various geographical regions, with distinct performance metrics:
| Region | Q3 2024 Net Sales | Q3 2023 Net Sales | Year-to-Date 2024 Net Sales | Year-to-Date 2023 Net Sales |
|---|---|---|---|---|
| North America | $1,673 million | $1,654 million | $5,019 million | $4,985 million |
| Europe | $660 million | $616 million | $1,898 million | $1,888 million |
| Latin America | $311 million | $329 million | $958 million | $938 million |
| AMEA | $590 million | $657 million | $1,754 million | $2,139 million |
Earnings Per Share (EPS)
Kellogg's diluted earnings per share for Q3 2024 was reported at $1.05, an increase from $0.57 in Q3 2023. The year-to-date diluted EPS reached $2.83 compared to $2.09 in the previous year.
Cash Flow and Financing Activities
Net cash provided by operating activities for the year-to-date period ended September 28, 2024, was $1,293 million, down from $1,400 million in the prior year. Free cash flow for the same period was $853 million, compared to $894 million in the previous year.
| Cash Flow Metric | YTD 2024 | YTD 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $1,293 million | $1,400 million |
| Additions to Properties | ($440 million) | ($506 million) |
| Free Cash Flow | $853 million | $894 million |
Market Challenges and Opportunities
Kellogg has faced challenges from unfavorable foreign currency impacts, particularly in the AMEA region, which reported a decline in net sales by 10% year-over-year. However, Kellogg's organic net sales have shown resilience, with a reported growth of 6% when excluding foreign currency effects.
Strategic Initiatives
The company continues to focus on restructuring programs aimed at enhancing productivity and achieving long-term profit growth. Notably, a significant project aimed at optimizing the North American frozen supply chain is expected to yield substantial savings starting in late 2024.
How Kellogg Company (K) Makes Money
Revenue Streams
Kellogg Company generates revenue primarily through the sale of its food products, categorized into several segments: Snacks, Cereal, Frozen Foods, and Noodles & Other. The following table summarizes the reported net sales by segment for the year-to-date period ended September 28, 2024.
| Segment | Reported Net Sales (millions) | Organic Net Sales (millions) | % Change (2024 vs. 2023) |
|---|---|---|---|
| North America | $5,019 | $5,021 | 0.7% |
| Europe | $1,898 | $1,874 | 0.5% |
| Latin America | $958 | $978 | 2.2% |
| AMEA | $1,754 | $2,542 | (18.0%) |
| Corporate | $(4) | $(4) | N/A |
| Total | $9,625 | $10,411 | (3.2%) |
Operating Profit Analysis
For the year-to-date period ended September 28, 2024, Kellogg's reported operating profit was $1,342 million, reflecting a year-over-year increase of 13.9%. The operating profit by segment is detailed in the table below.
| Segment | Reported Operating Profit (millions) | Adjusted Operating Profit (millions) | % Change (2024 vs. 2023) |
|---|---|---|---|
| North America | $971 | $1,046 | 23.1% |
| Europe | $240 | $314 | 7.1% |
| Latin America | $102 | $99 | 3.6% |
| AMEA | $200 | $201 | (1.6%) |
| Corporate | $(171) | $(209) | N/A |
| Total | $1,342 | $1,451 | 13.9% |
Cost of Goods Sold (COGS) and Gross Margin
The cost of goods sold for the year-to-date period ended September 28, 2024, was $6,257 million, leading to a gross profit of $3,368 million. The gross margin for this period was 35.0%, an increase of 300 basis points compared to the previous year.
| Metric | Amount (millions) |
|---|---|
| Net Sales | $9,625 |
| Cost of Goods Sold | $6,257 |
| Gross Profit | $3,368 |
| Gross Margin | 35.0% |
Cash Flow and Investment Activities
Kellogg Company's net cash provided by operating activities for the year-to-date period ended September 28, 2024, was $1,293 million, compared to $1,400 million in the prior year. The free cash flow for the same period was $853 million, down from $894 million in the previous year.
| Cash Flow Activity | Amount (millions) |
|---|---|
| Net Cash from Operating Activities | $1,293 |
| Additions to Properties | $(440) |
| Free Cash Flow | $853 |
Market Trends and Challenges
As of 2024, Kellogg has faced challenges including adverse foreign currency fluctuations, particularly impacting its AMEA segment, which reported a 10% decrease in net sales year-on-year. However, organic net sales in the region increased by 22%, indicating strong local market performance despite currency challenges.
| Region | Reported Net Sales Change | Organic Net Sales Change |
|---|---|---|
| North America | 0.7% | 0.7% |
| Europe | 0.5% | 1.8% |
| Latin America | (5.5%) | 4.1% |
| AMEA | (18.0%) | 22.0% |
Conclusion of Financial Performance
Kellogg Company continues to adapt to market conditions with a focus on sustaining organic growth across its key product lines. The introduction of new products and strategic pricing adjustments have contributed positively to its revenue streams, while the company remains vigilant against external economic pressures.
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Article updated on 8 Nov 2024
Resources:
- Kellogg Company (K) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Kellogg Company (K)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kellogg Company (K)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.