BATTLE CREEK, MICH. — A continued focus on cost saving initiatives helped drive strong sales and earnings at The Kellogg Co. in fiscal 2008.
Net income in the year ended Jan. 3 was $1,148 million, equal to $3.01 per share on the common stock, up 4% from $1,103 million, or $2.79 per share, in fiscal 2007. Net sales were $12,822 million, up 9% from $11,776 million a year ago.
Fourth-quarter results, meanwhile, were dragged down by a 6c-per-share charge related to the recent peanut-related recall. For the quarter, net income totaled $179 million, or 47c per share, up narrowly from $176 million, or 45c per share. Sales were $2,933 million, up from $2,794 million.
"Kellogg delivered another year of sustainable and dependable results, despite significant cost pressures and the stress the economy is placing on consumers," said David Mackay, chief executive officer. "We also continued to focus on cost savings initiatives and added to our platform for future growth with acquisitions in Russia, China, the U.S. and Australia."
Operating profit at Kellogg North America rose 8% in the full year to $1,447 million buoyed by a 7% gain in net sales to $2,148 million.
Retail Cereal posted internal sales growth of 3%, while Retail Snacks achieved growth of 6%. The North America Frozen and Specialty Channels posted internal net sales growth of 9%.
At Kellogg International, net sales grew approximately 9%. The company’s Latin American and Europe regions each posted internal sales growth of 4%, while the Asia Pacific region rose 8%.
Operating profit at Kellogg in the full year rose 5% to $1,953 million, up from $1,868 million in the same period a year ago. For the fourth quarter, operating profit fell, dropping 4% to $345 million from $359 million.
Looking ahead to 2009, Kellogg said expenses related to the peanut-related recall will continue to weigh on earnings. As a result, the company narrowed its sales guidance for the year from mid-single-digit growth to between 3% and 4%.
Kellogg said it expects a negative 6c per share impact from the recall for all of 2009, the same as what the company recorded in the fourth quarter of fiscal 2008.
After closing at $43.49 on Feb. 4, the company’s stock opened today at $43.19 before climbing to a high of $44.25.