August 1, 2014
Kellogg Co., the world’s biggest maker of breakfast cereals, has posted a decline in sales in the U.S., its biggest market, for a fifth consecutive quarter. The company cut its full year sales and profits forecasts as a result of the increasing popularity of alternative breakfast foods such as yogurt and breakfast sandwiches. The cut to its full year adjusted profit forecast caused the company’s share value to decline 5%. Kellogg Co., which spends $1.5 billion per year on advertising and brand building, plans to re-position the company, focusing on the nutritional value of its cereals as consumers are demanding breakfast items that are not only low fat but also offer nutritional value. Net sales for the company’s snack business also fell 2.7% for the fourth time in the past five quarters. In the second quarter, the company’s cereal and snack businesses combined accounted for 46% of the company’s revenue. Because of the poor results for the two businesses, Kellogg’s overall full-year internal net sales are expected to decline by 1%-2%.
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