Kellanova has hiked its ad spend and is more focused on its portfolio after spinning off its cereal unit last year.
The multinational food company, which split off from its Kellogg cereal division in 2023, is reporting Q2 net income of $344 million, down about 4% from the same period last year, but topping analyst expectations.
On the strength of its first-half results, the company raised its full-year 2024 guidance for organic net sales growth.
Kellanova chairman, president and CEO Steve Cahillane noted strong growth in Canada during Thursday’s earnings call. In Canada, Kellanova’s brand portfolio includes Pringles, which more than doubled its Q2 value share north of the border compared with year prior, Cheez-It, Pop-Tarts, Rice Krispies Treats and Morningstar Farms.
In North America, the company says that for 2024, it will boost brand building and merchandising, as well as bolster innovation.
North America’s net sales in the second quarter increased very slightly year on year. However, North America’s Q2 reported operating profit increased by 21% year-on-year. Volumes also improved for the fourth consecutive quarter.
Broadly, top line growth was led by its biggest brand, Pringles, which will be a priority going forward and has “terrific momentum.”
“[Growth] was supported by fully restored commercial activity, including a double-digit increase in brand building investment while still improving profit margins,” Cahillane says.
The company promises to excel in marketing driven by data and analytics. In Europe, meanwhile, the company reports a “substantial increase in brand building investment.”
As Cahillane noted, the company’s sustained performance since the spin off provides evidence that Kellanova is “more focused, more growth-oriented and more profitable.”
In Kellanova’s earnings call, Cahillane says it’s also stepping up its innovation, returning to a “full innovation launch calendar.” In the second half of the year, it is launching bowtie-shaped Pringles Mingles in North America, and introducing Cheez-It to Europe, supported by a full slate of advertising, PR and sampling, and starting in the UK.
