Kellogg Company (K) Q2 2023 Earnings Call Transcript

Kellogg Company (NYSE:K) Q2 2023 Earnings Conference Call August 3, 2023 9:30 AM ET

Company Participants

John Renwick - Vice President of Investor Relations & Corporate Planning

Steve Cahillane - Chairman & Chief Executive Officer

Amit Banati - Vice Chairman & Chief Financial Officer

Conference Call Participants

Andrew Lazar - Barclays

Cody Ross - UBS

David Palmer - Evercore

Pamela Kaufman - Morgan Stanley

Steve Powers - Deutsche Bank

Alexia Howard - Bernstein

Bryan Spillane - Bank of America

Robert Dickerson - Jefferies

Michael Lavery - Piper Sandler

Matt Smith - Stifel

Operator

Good morning. Welcome to the Kellogg Company’s Second Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session with publishing analysts.

At this time, I will turn the call over to John Renwick, Vice President of Investor Relations and Corporate Planning for Kellogg Company. Mr. Renwick, you may begin your conference call.

John Renwick

Thank you, operator. Good morning and thank you for joining us today for a review of our second quarter results and an update on our outlook for 2023. I am joined this morning by: Steve Cahillane, our Chairman and Chief Executive Officer; and Amit Banati, our Vice Chairman and Chief Financial Officer.

Slide number 3 shows our forward-looking statements disclaimer. As you are aware, certain statements made today, such as projections for Kellogg Company’s future performance, are forward-looking statements. Actual results could be materially different from those projected.

For further information concerning factors that could cause these results to differ, please refer to the third slide of this presentation, as well as to our public SEC filings. A recording of today’s webcast and supporting documents will be archived for at least 90 days on the Investor page of KelloggCompany.com.

As always, when referring to our results and outlook, unless otherwise noted, we will be referring to them on an organic basis for net sales and on a currency-neutral adjusted basis for operating profit and earnings per share.

And now, I’ll turn it over to Steve.

Steve Cahillane

Thanks, John, and good morning, everyone. We're pleased to report another better than expected quarter featuring two key elements depicted on slide number 5. Not only did we sustain top line growth that remained better than our long-term targets, but we did so across our portfolio and geographies with growth in all major category groups in each of our four regions. And we did so even as we lapped the prior year's retail inventory replenishment and particularly strong in-market performance. We also continued to experience a sooner-than sooner than expected recovery in our gross profit margin. Much of this is related to bottlenecks and shortages diminishing. This recovery is ahead of schedule and it was a principal driver behind our better than expected profit and earnings this quarter.