Kellogg Co (K.N) raised its annual forecasts on Thursday after posting better-than-expected revenue and profit, signaling that the pandemic-induced surge in demand for its cereals and snacks has not weakened even as the U.S. economy reopens.
Fresh curbs in several parts of the world, including France, the United Kingdom and parts of Asia early this year have also helped demand as consumers stuck at home indulged in snacks.
Sales grew 10% in Europe and about 2% in North America, its biggest market, sending shares of Kellogg up 7%.
The company’s forecast raise came at a time when its peers including Kraft Heinz (KHC.O) and Mondelez International Inc (MDLZ.O) have flagged a hit to earnings from higher costs for sugar, wheat and soy as well as freight.
Kellogg said its increased forecast takes into account the higher costs, mainly thanks to better pricing of its products.
Known for its Corn Flakes and Honey Loops cereals, Kellogg projected full-year organic net sales to be nearly flat, compared to prior estimate of about 1% decline.
It also expects adjusted full-year profit per share on a currency-neutral basis to rise by about 1% to 2%, compared to its previous projection of about 1% rise.
“We’re expecting growth in emerging markets to sustain, maybe not at the double-digit rates that we saw in quarter 1,” Chief Financial Officer Amit Banati told investors.
Net sales rose to $3.58 billion in the quarter ended April 3 from $3.41 billion a year earlier. Analysts were expecting sales of $3.38 billion, according to IBES Refinitiv.
Excluding items, Kellogg earned $1.11 per share, beating analysts’ average estimate of 96 cents per share.