Revenue
Earnings
The consensus estimate is for EPS of $0.99 in Q1 2023 which compares to adjusted EPS of $1.10 reported in Q1 2022. In Q4 2022, adjusted EPS increased 13% YoY to $0.94.
Points to note
In the fourth quarter, Kellogg benefited from momentum in its snacks business. Strength in brands such as Pringles and Cheez-It helped drive strong sales growth during the quarter. The company also did well in emerging markets during the period. This strength is expected to continue in 2023 which means the first quarter is likely to benefit from this trend.
Kellogg also worked through several supply headwinds in the midst of its capacity restoration efforts for the North America cereal business. The recovery in this business benefited Q4 results. It is expected to perform well in 2023 which is an encouraging sign for Q1.
The Frozen Foods business also faced supply and capacity challenges but it gained traction helped by strong demand for the Eggo brand. This division is also expected to see a pickup in the coming months.
Kellogg continued to face high input cost inflation and it continues to tackle this through productivity initiatives and cost savings. The company anticipates input cost inflation to ease up during the second half of 2023 compared to the same period last year which means the first quarter is likely to have been pressured.