Kellogg raises annual sales forecast boosted by price increases

div classBodysc17zpet90 cdBBJodivpReuters Kellogg Co beat quarterly sales estimates and raised its 2022 forecast on Thursday, as higher prices helped counter the impact of a workers‘ strike at the company’s U.S. plants which led to a shortage of its cereals on store shelves. p

pShares of the Michiganbased company rose 2.4 in premarket trading. pdivdivdiv classBodysc17zpet90 cdBBJodiv

pCosts from freight and ingredients such as wheat, corn and edible oils have surged in the last year due to pandemicinduced disruptions to the global supply chain, forcing the packaged food industry to raise product prices to cushion the hit to their profit margins.p

pDemand has so far held up stronger than expected, but analysts warn that demand, especially for the pricier cereals that Kellogg makes, could slow later in the year as rampant inflation shows no sign of cooling.p

pKellogg cereal sales in North America fell by 10.3 in the first quarter, with the company blaming a near threemonth long strike that started in October at its U.S. plants, which make Froot Loops, Corn Flakes and other cereal brands. p

pA small fire at one of the plants in early December further constrained supplies, the company said. p

pThe company said it expects fiscal 2022 organic sales to rise 4, compared with its prior forecast of an about 3 increase. p

pNet sales rose 2.4 to 3.67 billion in the first quarter ended April 2. Analysts on average had expected sales of 3.59 billion, according to Refinitiv IBES data.p

pDespite betterthanexpected sales, Kellogg kept its 2022 adjusted earnings per share growth forecast unchanged at 1 to 2, accounting for soaring costs and the impact of the RussiaUkraines crisis. p

p Reporting by Uday Sampath in Bengaluru Editing by Krishna Chandra Elurip

divdivdiv classBodysc17zpet90 cdBBJodivdivdiv