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(Sharecast News) - American cereal maker WK Kellogg on Tuesday lowered its sales and profit forecasts for 2025, citing a weaker-than-expected first quarter and a "modest impact" from the Trump administration's trade tariffs.
Net sales are expected to fall by 2-3% this year on an organic basis, compared with previous expectations of a 1% decline. Adjusted EBITDA is estimated to be flat to 2% lower, down from previous guidance of 4-6% growth.
WK Kellogg said its new outlook includes the negative effects of tariffs as it sources raw materials outside of North America, and assumes that most production remains exempt from tariffs on imports from and exports to Canada and Mexico.
"However, there can be no assurance that this suspension will remain in place indefinitely or whether any new or expanded tariffs may further impact our business and results of operation," the company said in a statement.
The company, which was formed when Kellogg's split its cereal operations from its convenience and snack foods businesses in 2023, has experienced "weaker-than-expected consumption trends" so far in 2025, with net sales down 6.2% year-on-year at $663m in the first quarter.
On an organic basis, net sales were 5.6% lower than last year, with a reduction in retailer inventory due to the timing of Easter and the lapping of a large retailer promotion also having an impact.
Net income was down 45.5% at $18m due to the impact of business, portfolio realignment and restructuring costs related to a supply chain "modernisation plan", the company said. Excluding these costs, adjusted EBITDA fell 4% to $72m.
The share price was 4.2% lower at $16.63 by 1044 in New York.
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