Kellogg Co announced that its earnings for the second quarter had dropped by 24% as its international sales were hit by the stronger dollar and weak demand domestically for its cereal and other types of its packaged foods.
Kellogg, based in Battle Creek, Michigan along with other food companies in the U.S. has been grappling with the shifting tastes of consumers for foods they perceive as being healthier and fresher.
The maker of Pop-Tarts and Frosted Flakes has announced a new cost-cutting plan that will be that will take a few years to implement and has been dubbed Project K. It will include the closing of plants and the lowering of its workforce by over 7%.
In its latest reporting period sales at Kellogg of its breakfast foods domestically fell by 2.2% to just over $742 million.
John Bryant the CEO and Chairman at Kellogg said that excluding the impact by currency its European, Latin American and Asian snack business posted growth in sales, while its business in North America benefited from trends that were improving.
Kellogg overall reported profit that reached $223 million equal to 63 cents per share, which is down from last year at the same time of $295 million equal to 82 cents per share.
Excluding expenses related to restructuring, the negative impact related to a re-measure of its business in Venezuela and other special items, earnings per share were 92 cents compared to last year’s $1.02.
Revenue fell 5.1% to end the quarter at $3.5 billion. Excluding fluctuations for currency and impacts due to acquisitions sales was up 0.1%.
Analysts had predicted that a profit per share would be 92 cents with revenue reaching over $3.47 billion. Kellogg affirmed its outlook for the rest of 2015.
Consumers have changed their eating habits at every meal of the day, with more and more spending more and buying products they feel are healthier, that are organic and do not have artificial color or flavors.
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