Kellanova Misses Q1 Earnings Target Amid Soft U.S. Demand and Currency Headwinds
Kellanova (NYSE: K), the global snacking and cereal company, reported its first-quarter 2025 financial results on May 1, 2025. The company posted net sales of $3.08 billion, a 3.6% decrease from the same period in 2024, falling short of analysts’ expectations of $3.18 billion. Adjusted earnings per share (EPS) declined by 10.9% to $0.90, missing the consensus estimate of $1.01.
The decline in net sales was attributed to unfavorable foreign currency translation and lower volumes, particularly in North America, where sales dropped by 4% due to softened demand in the snacking and frozen categories. Europe and Latin America also experienced sales declines, while the Asia Pacific, Middle East, and Africa (AMEA) region saw a 3% increase in reported net sales, driven by volume growth and favorable pricing in Nigeria.
Despite the challenges, Kellanova’s reported net income rose by 13.8% to $308 million, or $0.87 per diluted share, compared to $271 million, or $0.78 per share, in the prior-year quarter. This increase was primarily due to the lapping of prior-year restructuring charges and a lower effective tax rate.
The company is currently in the process of being acquired by Mars, Incorporated, in a $35.9 billion deal announced in August 2024. The transaction, approved by Kellanova shareholders in November 2024, is expected to close in the first half of 2025, pending regulatory approvals.
Due to the pending merger, Kellanova has not provided forward-looking guidance. However, the company stated that it is planning contingencies and taking actions to manage through continued global economic uncertainty.
