Kellogg, the food manufacturing company with brands that
include Frosted Flakes, Pop Tarts, Eggo, and Kashi, released third quarter
earnings and announced it would be cutting the company’s work force by 7% over
the next four years. It is calling the initiative “Project K: A global
four-year efficiency and effectiveness programs” which of course is a nice
branded way of saying 2,170 jobs are about to go away.
The company expects to save up to $475M per year as a result of this initiative, with the savings being reinvested in other strategic focus areas of the company. The project will focus on Kellogg’s supply chain, business services, and operations. They want to increase efficiency and margins by reducing facilities and eliminating excess capacity.
Kellogg had solid earnings with a Q3 EPS of $.90 beating by $.06 and revenue of $3.72B beating by $.01B. However, sales in North America fell 1.3% to $2.4B on broad weakness across segments. Profit narrowed slightly on high cost of goods. . Revenue from their Morning Foods declined 2.2% to $883M for the quarter, and U.S. Snack Foods saw net sales decline 2.5% to $886M.
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