HomeNewsWhy Investors Found WK Kellogg Stock So Tasty This Week

Why Investors Found WK Kellogg Stock So Tasty This Week

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The market was eager to swallow a giant helping of WK Kellogg (KLG 0.60%) stock this week. Collectively, it traded the specialty food company’s shares more than 20% higher over the period, according to data compiled by S&P Global Market Intelligence. Investors liked what they saw in the company’s latest quarterly earnings report.

A tale of two line items in the fourth quarter

Kellogg released that report on Tuesday, revealing that its net sales for the quarter came in at $651 million. That was nearly 4% below the fourth-quarter 2022 tally of $676 million. On a brighter note, the cereal maker flipped to a net profit of $15 million ($0.18 per share) against a steep $152 million loss one year prior.

While that jump into the black on the bottom line was heartening, it fell just short of the average analyst estimate of $0.21 per share. Conversely, despite the revenue slide, the top line beat the consensus projection of over $646 million.

Kellogg, the company behind longtime cereal favorites, like Corn Flakes, Rice Krispies, and Raisin Bran, said the top-line dip during the quarter was attributable to “price elasticities and lower promotional spend.” As for the vastly improved bottom line, the company chalked that up largely to better operational cost discipline.

EBITDA growth expected

That revenue slip/profitability gain dynamic could also play out across the entirety of 2024. Kellogg proffered selected guidance for the year, forecasting that net sales should be negative 1% to positive 1% over the 2023 figure. Non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) should rise at a 3% to 5% clip. The company did not provide an estimate for net income.

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