WK Kellogg Co reported its financial results for the quarter ended September 28, 2024, reflecting a challenging period post-spin-off from Kellanova. The company recorded net sales of $689 million, a slight decrease from $692 million in the same quarter of the previous year. Year-to-date net sales also fell to $2,068 million from $2,112 million, marking a 2.1% decline. The decrease in sales volume was approximately 4% for the quarter and 7% year-to-date, although revenue growth management initiatives contributed to a favorable price/mix of about 4%.
The company's operating profit for the quarter was a loss of $6 million, compared to a profit of $17 million in the prior year. Year-to-date operating profit improved to $87 million from $71 million, indicating some operational efficiencies. However, net income for the quarter was a loss of $11 million, a significant drop from a profit of $42 million in the same quarter last year. Year-to-date net income also decreased to $53 million from $95 million. Basic and diluted earnings per share for the quarter were $(0.13), down from $0.49 in the prior year.
Total current assets decreased to $602 million from $706 million, while total current liabilities increased to $770 million from $836 million. Total equity rose slightly to $316 million from $300 million. The company reported cash and cash equivalents of $47 million, down from $89 million at the end of the previous fiscal year.
WK Kellogg Co is undergoing a significant restructuring plan aimed at modernizing its supply chain, which includes closing its Omaha plant by the end of 2026 and scaling back production at the Memphis facility starting in late 2025. This plan is expected to incur cumulative pretax charges between $230 million and $270 million, with $41 million recorded in restructuring charges for the current quarter.
The company also reported a decrease in selling, general, and administrative expenses, which fell to $162 million for the quarter from $179 million in the previous year, primarily due to reduced spin-off related costs. The effective tax rate for the quarter was 27.8%, up from 23.9% in the prior year.
Overall, WK Kellogg Co's financial performance reflects the complexities of operating as a standalone entity post-spin-off, with ongoing challenges in sales volume and profitability amid restructuring efforts.
About WK Kellogg Co
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