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The breakfast-cereal market remains soggy for Kellogg Co.
The company posted disappointing first-quarter sales on Thursday, hurt by a weak performance in its U.S. morning-foods division. The shares fell the most in more than two months.
Kellogg, the world's largest cereal maker, has worked to turn around ts struggling morning-foods unit, which was hit by a broad drop in U.S. cereal sales. Kellogg has argued the category can return to growth this year as younger consumers embrace the long-time breakfast staple as a snack. Still, sales have remained sluggish so far this year.
"We would have liked it to be a little better, but it wasn't far away from what we expected to see," Chief Executive Officer John Bryant said in an interview. "We expect the cereal business to build momentum throughout the year."
To offset falling sales, Kellogg — like its competitors across the U.S. food industry — has been cutting costs to improve margins. Profit in the first quarter was 97 cents a share, excluding some items, the Battle Creek, Michigan-based company said in a statement Thursday. Analysts projected 94 cents, on average. Sales slid 4.5 percent to $3.4 billion in the period, trailing analysts' average estimate of $3.46 billion.
The stock slipped as much as 2.8 percent to $74.88 after the results were released, the biggest intraday drop since Feb. 22. Kellogg had gained 6.6 percent this year through Wednesday.
Kellogg also announced that Chief Financial Officer Ron Dissinger will retire at the end of the year. Dissinger has been with Kellogg for almost 30 years, the company said.