Kellogg (K), the maker of Corn Flakes and Pringles chips, reported a steeper-than-expected drop in quarterly sales as demand for its breakfast cereals and snacks remained sluggish in the United States, its biggest market.
The company’s shares were down 2% in morning trading on Thursday. They had risen 20% in the past year.
Kellogg, like other big food makers, has seen sales decline as consumers opt for healthier foods such as yogurt and sandwiches over sugary and processed products.
Sales in Kellogg’s U.S. snacks business, its largest, which sells Cheez-It crackers and Pringles chips, fell 2.6% in the first quarter ended April 2.
Sales in its U.S. morning foods business, which makes Corn Flakes and Froot Loops, fell 1.2%.
Total sales fell 4.5% to $3.40 billion, declining for the fifth straight quarter. Analysts on an average had expected a drop to $3.47 billion, according to Thomson Reuters I/B/E/S.
The 110-year old company’s net income also fell, mainly due to a $217 million interest expense bill related to a bond tender. However, Kellogg’s cost-saving measures helped its adjusted profit beat estimates.
Net income attributable to Kellogg fell to $175 million, or 49 cents per share, from $227 million, or 64 cents per share.
Excluding impact from its Venezuela business and other items, earnings were 97 cents per share. Analysts were expecting 94 cents.