WK Kellogg has cut its annual organic sales and core profit forecasts after consumer spending weakened on its higher-priced products including Frosted Flakes and Apple Jacks cereals.
Shares of the Michigan-based company fell nearly 11% after it missed first-quarter sales and profit expectations.
Customers are bracing for another inflationary market burdened by price increases as companies try to navigate higher input costs brought on by US President Donald Trump’s erratic tariff implementation.
WK Kellogg has already witnessed pushback from consumers after it ramped up prices over the last several quarters to counter input costs, pushing cost-conscious shoppers away.
Its product pricing rose 3%, while volumes slumped 8.6% in the reported quarter.
Kraft Heinz and Kellanova have also reported bleak quarterly results, given subdued consumer spending in the US. The US economy contracted for the first time in three years in the first quarter, hit by a flood of imports as businesses raced to avoid higher costs from tariffs, as well as softening consumer spending.
WK Kellogg expects full-year organic net sales to now decrease between 2% and 3%, compared with a prior expectation of a 1% fall.
It expects full-year net adjusted EBITDA, or earnings before interest, tax, depreciation and amortisation, between $270m and $275m, compared with a previous expectation of between $286m and $292m.
The Froot Loops maker said its 2025 forecast includes a modest impact from tariffs, primarily related to sourcing raw materials outside North America. This impact would be between $2-4m, based on the tariffs currently in place, CFO David McKinstray said.
WK Kellogg’s quarterly net sales fell 6.2% to $663m, compared with analysts’ average expectation of $679.5m, according to data compiled by LSEG.
It reported earnings of 20 cents per share, missing analysts’ estimate of 40 cents per share.
