Kellogg Plunges Most in 18 Years After Company Trims Forecast
(Bloomberg) -- Kellogg Co. shares plunged the most intraday since 2000 after the company cut its profit forecast and reported a decline in U.S. breakfast foods -- underscoring the difficult road that packaged food companies are facing as consumer tastes change.
- The company assured investors that cereal sales -- an area of concern -- are turning around. The performance, however, was held back by a June recall of Honey Smacks. Kellogg is trying to boost sales of healthier cereals as consumer preferences shift.
- Kellogg cut its full-year profit forecast as it increases investment. Chief Executive Officer Steve Cahillane said higher spending on brands and new pack formats are leading the company to sales growth.
- Higher distribution and transportation costs also had an impact. The company said it was offsetting these with productivity improvements.
- The shares fell as much as 9.6 percent to $64.95, erasing the stock’s 5.7 percent advance this year through Tuesday’s close. The drop was the most intraday since 2000.
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