| Make foodmate.com your Homepage | Wap | Archiver
Advanced Top
Search Promotion
Search Promotion
Post New Products
Post New Products
Business Center
Business Center
Current Position:Home » News » Processed Foods » Sweets & Desserts » Topic

Kellogg, Hillshire sales light as Americans cut back on desserts

Zoom in font  Zoom out font Published: 2013-05-03  Origin: Reuters  Authour: Martinne Geller  Views: 34
Core Tip: Kellogg Co (KN) and Hillshire Brands (HSH.N) reported weaker-than-expected quarterly sales on Thursday, as budget-conscious U.S. consumers cut back on desserts, sending the food companies' shares lower.
Sara Lee frozen cakesKellogg, which makes Keebler cookies, posted a quarterly profit in line with estimates and stood by its full-year outlook. Hillshire, which owns Sara Lee frozen cakes, reported a better-than-expected profit and said 2013 earnings would be at the high end of its forecast.

Still, a 21 percent gain in food sector stocks this year has given food makers very high multiples, which demands better performance. Investors have been enticed by the promise of high-yield investments and hope for more deal-making following the buyout of H.J. Heinz Co (HNZ.N) and speculation of a merger between PepsiCo (PEP.N) and Mondelez (MDLZ.O,的).

Specifically, Kellogg shares rose nearly 16 percent and Hillshire shares rose more than 26 percent through Wednesday, fueling expectations of strong results.

"When you go on big runs like that, you have to beat and raise guidance," Edward Jones analyst Brian Yarbrough said, adding that for Kellogg, "This is just a ho-hum quarter, so I think there could be a little profit-taking."

Kellogg sales rose to $3.86 billion, but missed analysts' average estimate of $3.94 billion, according to Thomson Reuters I/B/E/S.

Shares of Kellogg, which also makes Corn Flakes cereal and Eggo waffles, fell 2.8 percent to $62.81 on the New York Stock Exchange, while Hillshire, which also makes Ball Park hot dogs and Jimmy Dean sausages, fell 3 percent to $34.49.

Hillshire, which separated last year from D.E Master Blenders 1753 (DEMB.AS) and is now seen as a potential takeover target, reported quarterly revenue of $924 million, which was below analysts' average estimate of $953.3 million, according to Thomson Reuters I/B/E/S.


Kellogg said net income was $311 million, or 85 cents per share in the first quarter, down from $351 million, or 98 cents per share, a year earlier.

The decline in profit was largely due to the rising cost of commodities, Kellogg said, adding that the first quarter included most of the inflation it expects for the full year.

Excluding items including a hit from the devaluation of Venezuela's currency, earnings were $1.02 per share, in line with analysts' average estimate, according to Thomson Reuters I/B/E/S.

Kellogg Chief Executive John Bryant said the one business that was softer than he would like was cookies, where consumption fell 5.5 percent in the quarter.

For Hillshire, sales in its foodservice business declined due to weakness in frozen bakery products.

"Consumers continued their retreat from desserts amidst challenged household budgets," Sean Connolly, Hillshire CEO, said on a conference call.

Slow sales of cookies and sweets could bode poorly for Mondelez, which will report quarterly results next week.

Kellogg, the world's biggest cereal maker, said it was on track to meet its goal for the full year, which calls for profit growth of 5 percent to 7 percent. That would translate to earnings of $3.82 to $3.91 per share.

[ News search ]  [ ]  [ Notify friends ]  [ Print ]  [ Close ]

0 in all [view all]  Related Comments

Hot Graphics
Hot News
Hot Topics
Powered by Global FoodMate
Message Center(0)