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Kellanova (K) investor relations material

Kellanova Q2 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q2 2025 earnings summary31 Jul, 2025

Executive summary

  • Net sales for Q2 2025 were flat year-over-year, with growth in Africa noodles offset by softness in other categories and regions.

  • Operating profit declined 11% year-over-year, mainly due to negative mark-to-market impacts and lower sales outside Africa.

  • Diluted EPS fell 15% to $0.85, with adjusted currency-neutral EPS down 7.9% to $0.93.

  • Mars agreed to acquire the company for $83.50/share in cash, with closure expected by end of 2025, pending regulatory approvals.

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

Financial highlights

  • Q2 2025 net sales: $3.20B (up 0.3% year-over-year); YTD net sales: $6.29B (down from $6.39B YTD 2024).

  • Q2 2025 net income: $299M (down from $344M); YTD net income: $603M (down from $611M).

  • Q2 2025 operating profit: $438M (down from $493M); adjusted operating profit down 5% to $477M.

  • Q2 2025 gross margin: 34.0% (down 240 bps); currency-neutral adjusted gross margin: 34.7%.

  • Free cash flow for YTD 2025 was $(39)M, down from $443M YTD 2024, mainly due to higher pension contributions and capital expenditures.

Outlook and guidance

  • Management expects the merger with Mars to close by year-end 2025, but timing remains uncertain.

  • Modest input cost inflation is expected for full-year 2025, with potential upward pressure from new tariffs.

  • No material impact anticipated from recent U.S. tax law changes.

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Frequently asked questions

The Company Behind Corn Flakes

Kellogg Company, most commonly referred to as Kellogg's, is a global food manufacturer with a diverse product range. While its history is rooted in Battle Creek, Michigan, which is where Corn Flakes were invented and where the headquarters still are, the company has since evolved considerably. Today, beyond its iconic cereals, Kellogg's portfolio spans a variety of convenience foods, such as snacks, frozen items, and plant-based protein products. The brand operates on an international scale, distributing its products across the world.

Battle Creek Through and Through

Kellogg's has its roots in Battle Creek, Michigan, where it was founded by brothers John Harvey and Will Keith Kellogg in the early 20th century. The discovery of their flagship product, Corn Flakes, was accidental. In 1894, while experimenting with wheat-based meals for patients at the Battle Creek Sanitarium where John served as superintendent, they accidentally left some cooked wheat out overnight. Upon returning, they found it had turned into flakes. They decided to toast these flakes, leading to the creation of the first Corn Flakes. Seeing the potential, W.K. Kellogg founded the Battle Creek Toasted Corn Flake Company in 1906. The brand quickly gained popularity, prompting a name change to the Kellogg Company in 1922. Over the years, Kellogg's expanded its product line and grew internationally. Today, it stands as one of the leading global producers of cereal and convenience foods.

Not Just Corn Flakes

Kellogg's, while renowned for its iconic Corn Flakes, offers a diverse range of products beyond this staple breakfast cereal. Among their offerings are various cereals like Frosted Flakes, Special K, Rice Krispies, and Raisin Bran. Moreover, Kellogg's has ventured into snack foods, with products such as Pop-Tarts, Pringles, and Cheez-It crackers. Its reach also extends to granola bars, protein shakes, and plant-based meat alternatives through the MorningStar Farms brand. When looking at some publicly traded companies that compete with Kellogg’s, we find names such as General Mills, Post Holdings, and The Kraft Heinz Company.

International Expansion

Kellogg's has successfully transitioned from its small town home to become a globally recognized brand, with a presence in over 180 countries. Its international expansion began in the early 20th century when it opened production facilities in Canada and the UK. From there, the company strategically entered various markets, adapting its product lineup to suit local tastes and preferences. For instance, in Asia, Kellogg's introduced flavors catering to regional palates, while in Europe they acquired brands that already had a strong foothold.

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