Kellanova K delivered fourth-quarter 2024 results, wherein the top and bottom lines beat the Zacks Consensus Estimate, and earnings grew year over year. Although sales declined year over year, organic sales increased due to improved volumes and price/mix. 

This marked another strong quarterly performance, driven by a growth-focused portfolio and effective execution across the organization. With a robust presence in emerging markets, Kellanova achieved better-than-expected sales growth despite tough industry conditions while improving profit margins at a faster pace than expected.

On Aug. 14, 2024, Kellanova unveiled a deal with Mars, Incorporated (a global leader in pet care, snacking and food), per which Mars will acquire Kellanova for $83.50 per share in cash. The transaction is anticipated to close in the first half of 2025, subject to various approvals. Kellanova is not issuing any guidance due to its pending merger with Mars, Incorporated.

K’s Q4 Performance: Key Insights

Kellanova posted adjusted earnings of 92 cents per share, which increased 17.9% year over year, driven by increased operating profit. On a currency-neutral basis, adjusted earnings per share (EPS) rose 19.2% to 93 cents. The bottom line surpassed the Zacks Consensus Estimate of 82 cents.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The company recorded net sales of $3,124 million, which surpassed the Zacks Consensus Estimate of $3,093 million. However, the top line fell 1.6% year over year. The downside can be attributed to unfavorable currency movements. Organic net sales (excluding currency impacts) grew 7%, driven by improved volumes and price/mix.

Kellanova’s adjusted operating profit increased 14.4% to $448 million while rising 19.9% to $470 million on a currency-neutral basis.

Decoding Kellanova’s Segment-Wise Results

Sales in the North America segment amounted to $1,561 million, down 1.7% year over year due to the adverse price/mix and currency headwinds, partly made up by volume growth. On an organic basis, sales fell 1.5%.

Revenues in the Europe segment totaled $601 million, down 2% year over year due to currency headwinds and soft volumes stemming from category softness. This was partly made up by improved price/mix. Organically, net sales dropped 1.2%. 

Revenues in Latin America totaled $303 million, down 7.6% year over year due to currency headwinds, partly made up by the favorable price/mix. Organically, sales ascended 5.5%.

Revenues in the Asia Pacific and the Middle East & Africa segment totaled $659 million, up 2.1% year over year due to improvement in volumes and price/mix, somewhat negated by currency headwinds. Organically, sales jumped 36.4%.

Kellanova Stock: Other Updates

The company ended the reported quarter with cash and cash equivalents of $694 million, long-term debt of $4,998 million and total equity of $3,882 million.

Kellanova generated net cash from operating activities of $1,760 million for the year ended Dec. 28, 2024. Capital expenditures amounted to $628 million, and free cash flow was $1,132 million during this time.

Shares of this Zacks Rank #3 (Hold) company have rallied 10.5% in the past six months compared with the industry’s growth of 5.3%.

3 Solid Bets

United Natural Foods, Inc. UNFI currently sports a Zacks Rank of 1 (Strong Buy). UNFI delivered a trailing four-quarter earnings surprise of 553.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for United Natural’s current financial-year sales and earnings indicates growth of 0.3% and 442.9%, respectively, from the year-ago period’s reported figure.

TreeHouse Foods THS, a private-brand snacks and beverages company, presently holds a Zacks Rank #2 (Buy). THS delivered a trailing four-quarter earnings surprise of 20.4%, on average.

The Zacks Consensus Estimate for TreeHouse Foods’ full-year 2025 sales and earnings implies growth of 1.2% and 24.9%, respectively, from the year-ago period’s reported figure.

US Foods Holding USFD, which engages in marketing, sale and distribution of fresh, frozen, and dry food and non-food products, currently carries a Zacks Rank #2. USFD delivered a positive earnings surprise of 3.7% in the last reported quarter.

The consensus estimate for US Foods’ full-year sales and earnings calls for growth of 5.2% and 22.1%, respectively, from the prior-year reported levels.

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