Kellogg Has Strong Third Quarter

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Kellogg Has Strong Third Quarter

Kellogg Co. reported third-quarter sales growth driven by significantly increased levels of brand-building investment.

Net sales in the third quarter increased by 7.3 percent, to $2.62 billion. Excluding the effect of currency translation, Kellogg's internal sales growth was 6.6 percent. Reported net earnings for the quarter increased by 11 percent to $274.3 million. Reported net earnings for the first nine months of the year increased by 12 percent to $788.0 million.

"We are very pleased with the strong results we have achieved this year," said Jim Jenness, Kellogg's chairman and CEO. "This strength has provided us the flexibility to significantly increase our investment in future growth."

Kellogg North America's internal net sales growth was approximately 8 percent for both the third quarter and the first nine months of the year. This quarter's growth builds on growth of 5 percent in the third quarter of last year.

The North America Retail Snacks business again posted good results; internal sales growth was 6 percent. The cracker and wholesome snack product groups reported increased sales. Pop-Tarts toaster pastries posted lower sales as a result of a difficult comparison to strong double-digit growth in the third quarter of last year. The Pop-Tarts brand has increased its share of the toaster pastries category by almost 1.5 percent year-to-date. The cookie product group posted a sales decline due, in part, to the discontinuation of certain products late last year.

North America Retail Cereal posted an increase in internal sales of 11 percent. The quarter's growth was driven by successful brand-building programs and the introduction of new products in the first three quarters of the year, the company said.

North America Frozen and Specialty Channels posted internal net sales growth of 8 percent as Eggo frozen foods, Morningstar Farms veggie foods, and the Food Away From Home businesses all contributed strong sales gains.

With 2004 sales of nearly $10 billion, Kellogg Co. is the world's leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles, and meat alternatives.