Kellanova (K) investor relations material

Executive summary

• Net sales for Q3 2025 increased 0.9% year-over-year, driven by strong growth in Africa noodles and favorable currency, offset by softness in other categories and regions.

• Operating profit declined 1% year-over-year due to lower mark-to-market benefit and higher costs, partially offset by lower expenses; adjusted operating profit rose 7.3% and currency-neutral adjusted operating profit increased 6.6%.

• Diluted EPS was $0.88, down 16.2% from prior year, mainly due to lower mark-to-market benefit and a higher effective tax rate; adjusted EPS increased 3%.

• A proposed merger with Mars, Incorporated for $83.50 per share in cash is pending, expected to close by end of 2025, subject to regulatory approvals.

• Shareholders approved the Mars acquisition on November 1, 2024.

Financial highlights

• Q3 2025 net sales: $3.26B (up 0.9% YoY); YTD net sales: $9.55B (down 0.8% YoY).

• Q3 2025 operating profit: $452M (down 1% YoY); adjusted: $473M (up 7.3% YoY); YTD operating profit: $1.32B (down 1.6% YoY).

• Q3 2025 diluted EPS: $0.88 (down 16.2% YoY); adjusted diluted EPS: $0.94 (up 3% YoY); YTD diluted EPS: $2.61.

• Q3 2025 gross margin: 33.3% (down from 36.4% YoY); adjusted gross margin: 33.4%.

• Free cash flow YTD: $320M (down from $853M YoY), mainly due to higher pension contributions and capital expenditures.

Outlook and guidance

• Modest input-cost inflation expected for full-year 2025, with potential for higher pressure due to tariffs.

• Management plans to mitigate inflation through productivity, alternative sourcing, and revenue growth management.

• Liquidity remains strong with $2.5B in unused revolving credit and continued access to commercial paper markets.

• No forward-looking guidance provided due to pending merger.