Kellogg(US:K)2025-10-30 12:01Financial Performance - Reported net sales for Q3 2025 were $3,260 million, a slight increase of 0.9% year on year, while year-to-date net sales decreased by 0.8% to $9,546 million[8]. - Adjusted operating profit for Q3 2025 increased by 7.3% year on year to $473 million, while year-to-date adjusted operating profit decreased by 4.1% to $1,391 million[8]. - Reported diluted earnings per share (EPS) for Q3 2025 decreased by 16.2% to $0.88, and year-to-date EPS decreased by 7.8% to $2.61[8]. - Net income attributable to Kellanova for the quarter was $309 million, down from $367 million in the prior year, a decline of 15.8%[38]. - Year-to-date reported net sales for the period ended September 27, 2025, totaled $9,546 million, compared to $9,625 million in the previous year, marking a decline of 0.8%[50]. - Reported operating profit for Kellanova in the year-to-date period ended September 27, 2025, was $1,320 million, an increase of 1.1% compared to $1,342 million in the same period of 2024[61]. - Adjusted operating profit for the same period was $1,391 million, reflecting a decrease of 4.1% from $1,451 million in 2024[62]. - Reported diluted earnings per share (EPS) for the quarter ended September 27, 2025, was $0.88, down from $1.05 in the same quarter of 2024, representing a decrease of 16.2%[70]. - Adjusted EPS for the quarter ended September 27, 2025, was $0.94, compared to $0.91 in 2024, showing an increase of 3.3%[70]. Regional Performance - North America's reported net sales decreased by 3% in Q3 2025, while reported operating profit increased by 15% year on year[19]. - Europe's reported net sales decreased by 1% year on year in Q3 2025, with reported operating profit decreasing by 27%[21]. - Latin America's reported net sales decreased by 1% in Q3 2025, with reported operating profit decreasing by 47% year on year[23]. - AMEA's reported net sales increased by 14% year on year in Q3 2025, with reported operating profit increasing by 5%[25][26]. - Organic net sales growth in North America for snacks was reported at (3.1)% for the year-to-date period ended September 27, 2025[72]. - The company experienced a significant increase in noodles and other products in the AMEA region, with a growth rate of 28.7%[72]. - Reported net sales in North America for Snacks decreased by 4.1% and Frozen by 0.8% year-to-date 2025 compared to 2024[74]. - Organic net sales for Snacks in Europe declined by 5.5% and Cereal by 2.2% year-to-date 2025 compared to 2024[74]. - In Latin America, Snacks saw an increase of 0.2% while Cereal decreased by 12.7% year-to-date 2025 compared to 2024[74]. Cash Flow and Liquidity - Year-to-date net cash provided by operating activities was $788 million, with free cash flow of $320 million[16]. - Free cash flow for the year-to-date period ended September 27, 2025, was $320 million, significantly lower than $853 million for the same period in 2024, a decrease of 62.5%[40]. - The company reported a net cash provided by operating activities of $788 million for the year-to-date period ended September 27, 2025, compared to $1,293 million in the same period of 2024, a decline of 39.1%[40]. - The company’s cash and cash equivalents at the end of the period were $240 million, down from $569 million at the end of the same period in 2024, a decrease of 57.8%[40]. - The company’s cash and cash equivalents decreased to $240 million from $694 million, highlighting liquidity challenges[41]. Debt and Equity - Total debt liabilities as of September 27, 2025, amounted to $5,626 million, down from $5,743 million as of December 28, 2024[75]. - Net debt increased to $5,386 million as of September 27, 2025, compared to $5,049 million as of December 28, 2024[75]. - The company’s total equity increased to $4,295 million from $3,882 million, reflecting strong financial health[41]. - Current liabilities rose to $5,110 million, up from $4,660 million, reflecting an increase in current maturities of long-term debt and accounts payable[41]. - Retained earnings increased to $9,696 million from $9,358 million, indicating a positive trend in profitability[41]. Merger and Acquisition - Kellanova is not providing forward-looking guidance due to the pending merger with Mars, Incorporated, expected to close towards the end of 2025[6]. - The pending acquisition by Mars, Incorporated is valued at $83.50 per share in cash, with shareholder approval received on November 1, 2024[3]. - The company is currently pursuing a proposed acquisition of Kellanova by Mars, Incorporated, which is subject to regulatory approvals and other conditions[36]. - Proposed merger costs impacted earnings by $16 million pre-tax, contributing to a diluted loss per share of $0.04[42]. - Proposed merger costs for the year-to-date period totaled $28 million, impacting overall profitability[61]. - Proposed merger costs incurred were $16 million for the quarter ended September 27, 2025, related to the acquisition by Mars[80]. Other Financial Metrics - Reported gross profit for the quarter was $1,085 million, down from $1,176 million in the prior year, resulting in a reported gross margin of 33.3%[53]. - Adjusted gross profit for the quarter was $1,089 million, leading to an adjusted gross margin of 33.4%[53]. - Reported operating profit for the quarter was $452 million, compared to $456 million in the same quarter of 2024, indicating a slight decrease[58]. - Adjusted operating margin for the same period improved to 14.6%, compared to 15.1% in 2024[64]. - The foreign currency impact for the year-to-date period was a loss of $74 million, affecting overall profitability[45]. - The foreign currency impact on reported net sales for the quarter was a negative $43 million, affecting various regions differently[47]. - Volume (tonnage) for the quarter decreased by 1.4%, with pricing/mix contributing positively with a 0.9% increase[47]. - The company recorded a pre-tax mark-to-market gain of $7 million and a loss of $10 million for the year-to-date periods ended September 27, 2025[77]. - Pre-tax charges related to the separation transaction amounted to $2 million for the quarter ended September 27, 2025[78]. - The company incurred pre-tax charges of $8 million for network optimization in the quarter ended September 27, 2025[79].