Kellogg is making plans to lift costs and building up productiveness to offset the skyrocketing inflation it is seeing for enter prices, CEO Steve Cahillane advised CNBC on Thursday.
“As we input 2022, we’re nonetheless seeing double-digit price inflation,” Cahillane mentioned on “Squawk at the Side road”
“We are going to see the wraparound advantages of the pricing that we took in 2021 into 2022 … however our purpose is to hide all of the ones enter prices with pricing and productiveness, and we predict we are in excellent form to do this.”
The executive govt’s feedback come after Kellogg earlier than the bell reported better-than-expected benefit for its fiscal fourth quarter, with income in keeping with percentage of 83 cents topping estimates by means of 4 cents, in keeping with FactSet.
Kellogg stocks have been up just about 3% on Thursday afternoon, as traders additionally reacted to the corporate issuing a full-year benefit expansion outlook that exceeded Wall Side road’s expectancies.
Enforcing worth hikes remaining yr helped spice up the corporate’s earnings and battle the inflationary pressures it used to be experiencing. Cahillane mentioned consumers were keen to pay up even with upper worth tags, however Kellogg nonetheless plans to be wary about marking up costs this yr.
“We do not want costs to get too top, however we are in an atmosphere the place it is broad-based, it is throughout the entirety, however we now have been in a position to hide it. Our pricing efficiency has been very cast,” he mentioned.
The corporate’s cereal phase took a success remaining quarter because of employee moves. Cahillane mentioned different portions of the corporate’s portfolio “greater than made up for” cereal’s underperformance remaining quarter, and he expects the road to recuperate now that staff are again at paintings.
“For 2022, what we are truly having a look at is the primary part of the yr, a restoration of our stock, a restoration of our distribution, a recovery of our business plans, which is able to result in a again part of the yr that sees rising momentum in our cereal trade and an actual go back to commonplace,” he mentioned.
Cahillane mentioned Kellogg may additionally make some offers this yr, bringing up the corporate’s robust monetary place.
“We’ve got were given dried powder to take into accounts additions to the portfolio in the event that they upload shareholder worth … however we are very disciplined on the subject of worth,” he mentioned.
