Kellanova reports mixed Q3 earnings; initiates Q4 outlook

Net sales of approximately $3.1 billion vs. the consensus of $3.14 billion. This implies on-algorithm growth excluding the estimated impact of the WK Kellogg Co spin-off, as well as the Russia divestiture and foreign currency translation. We continue to assume rising elasticities and the lapping of last year’s sizeable price increases, partially offset by the return to full commercial activity.

•Operating profit of $380-$390 million on an adjusted basis. This implies on-algorithm growth excluding the estimated impact of the WK Kellogg Co spin-off, as well as the Russia divestiture and foreign currency translation. This outlook also includes the shift of some brand investment from earlier in the year, in a return to full commercial activity.

•Earnings per share of $0.73-$0.76 on an adjusted basis vs. the consensus of $0.70, implying a modest decline versus the prior year, as the aforementioned operating profit growth is offset by continued year-on-year headwinds from higher interest rates and lower pension income.

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