In This Article:
Packaged foods company Kellanova (NYSE:K) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 3.7% year on year to $3.08 billion. Its non-GAAP profit of $0.90 per share was 11.1% below analysts’ consensus estimates.
Is now the time to buy Kellanova? Find out in our full research report.
Kellanova (K) Q1 CY2025 Highlights:
-
Revenue: $3.08 billion vs analyst estimates of $3.15 billion (3.7% year-on-year decline, 2% miss)
-
Adjusted EPS: $0.90 vs analyst expectations of $1.01 (11.1% miss)
-
Adjusted EBITDA: $522 million vs analyst estimates of $597.5 million (16.9% margin, 12.6% miss)
-
Operating Margin: 13.9%, up from 12.3% in the same quarter last year
-
Free Cash Flow was -$60 million, down from $209 million in the same quarter last year
-
Organic Revenue was flat year on year (5.4% in the same quarter last year)
-
Sales Volumes fell 2.5% year on year, in line with the same quarter last year
-
Market Capitalization: $28.57 billion
Company Overview
With Corn Flakes as its first and most iconic product, Kellanova (NYSE:K) is a packaged foods company that is dominant in the cereal and snack categories.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $12.63 billion in revenue over the past 12 months, Kellanova is one of the larger consumer staples companies and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there are only a finite number of major retail partners, placing a ceiling on its growth. For Kellanova to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.
As you can see below, Kellanova’s demand was weak over the last three years. Its sales fell by 2.6% annually as consumers bought less of its products.
This quarter, Kellanova missed Wall Street’s estimates and reported a rather uninspiring 3.7% year-on-year revenue decline, generating $3.08 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 2.2% over the next 12 months. While this projection implies its newer products will spur better top-line performance, it is still below the sector average.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.