Sign in

You're signed outSign in or to get full access.

WK

WK Kellogg Co (KLG)·Q1 2026 Earnings Summary

Executive Summary

  • No public Q1 2026 earnings were reported for WK Kellogg Co because the company became a wholly owned subsidiary of Ferrero and ceased trading on the NYSE on September 26, 2025 .
  • The last reported quarter (Q2 2025) showed net sales of $613M (-8.8% y/y), diluted EPS of $0.09, and adjusted EBITDA of $57M with adjusted EBITDA margin of 9.4%; management suspended FY25 guidance due to the pending acquisition .
  • Q1 2025 results: net sales $663M (-6.2% y/y), diluted EPS $0.20, adjusted EBITDA $72M, adjusted EBITDA margin 10.8%; management cut FY25 guidance to organic net sales down 2–3% and adjusted EBITDA flat to down 2% .
  • No stock trading reaction in Q1 2026 given KLG’s delisting; previously, Q1 2025 results and guidance cut drove a premarket decline of 6.05% to $16.31, highlighting sensitivity to top-line pressure and outlook changes .

What Went Well and What Went Wrong

What Went Well

  • Management continued supply chain modernization and maintained commitment to ~500 bps margin expansion by exit-2026; CEO: “We continue to make meaningful progress against our long-term strategic priorities, including our supply chain modernization initiative” . CFO reiterated the ~500 bps margin expansion target timeline .
  • Q1 2025 adjusted gross margin improved to 29.4% (+20 bps y/y) and adjusted EBITDA margin to 10.8% (+20 bps y/y), reflecting efficiency gains despite volume pressure .
  • Strategic focus on health and wellness positioning (e.g., Special K protein granola, Kashi relaunch) to align with evolving consumer preferences; management emphasized the trend and activation plans in prepared remarks .

What Went Wrong

  • Category and consumption headwinds: Q2 2025 net sales -8.8% y/y; Q1 2025 organic net sales -5.6% y/y driven by volume declines (tonnage down 8.6%), inventory timing (Easter/retailer promo) and weaker consumption .
  • Q1 2025 missed Street expectations: revenue $663M vs $679.5M consensus and EPS $0.20 vs $0.40 consensus, prompting guidance cuts and negative stock reaction .
  • Guidance suspended with Q2 2025 press release amid merger process, limiting visibility for investors in H2 2025 prior to the acquisition close .

Financial Results

P&L and Profitability vs prior periods and Q1 2026

MetricQ1 2025Q2 2025Q1 2026
Reported Net Sales ($USD Millions)$663 $613 Not reported (private post-acquisition)
Diluted EPS ($USD)$0.20 $0.09 Not reported (private post-acquisition)
Adjusted EBITDA ($USD Millions)$72 $57 Not reported (private post-acquisition)
Adjusted EBITDA Margin (%)10.8% 9.4% Not reported (private post-acquisition)

Margin detail

MetricQ1 2025Q2 2025Q1 2026
Reported Gross Margin (%)29.4% 27.2% Not reported (private post-acquisition)
Adjusted Gross Margin (%)29.4% 31.0% Not reported (private post-acquisition)

Balance sheet and cash KPIs (latest publicly reported)

KPIQ2 2025Source
Net Debt ($USD Millions)$623
Cash and Equivalents ($USD Millions)$120
YTD Cash from Operations ($USD Millions)$16
YTD Capital Expenditure ($USD Millions)$124
YTD Free Cash Flow ($USD Millions)-$108

Note: Q1 2026 data are unavailable because KLG was private and did not publish quarterly results post-acquisition .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Net Sales Growth (%)FY 2025~(1.0)% (2.0)% to (3.0)% Lowered
Adjusted EBITDA Growth (%)FY 2025+4.0% to +6.0% Flat to (2.0)% Lowered
Adjusted EBITDA ($USD Millions)FY 2025$286–$292 (implied by prior growth) $270–$275 Lowered
Interest Expense ($USD Millions)FY 2025—$25–$30 New detail
Depreciation & Amortization ($USD Millions)FY 2025—$85–$90 New detail
Separation Costs ($USD Millions)FY 2025—$25–$30 New detail
Business/Restructuring Costs ($USD Millions)FY 2025—$105–$115 New detail
FY25 Guidance StatusFY 2025Lowered (May 6) Suspended (Aug 7) Suspended
DividendQ3 2025—$0.165/share declared (payable Sept 12, 2025) Announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Prior Quarter (Q2 2025)Current Period (Q1 2026)Trend
Supply chain modernizationCommitted to ~500 bps margin expansion by exit-2026; ERP implemented; significant capex to optimize network Progress continued; focus remained in press release statements No public commentary due to private status Continuing privately
Health/wellness focusEmphasized Special K/Kashi protein and nutrition claims, media campaign Maintained strategic messaging in press release No public commentary (private) Ongoing within Ferrero
Tariffs/macroAdded modest tariff impact to FY25 outlook; macro softness in packaged food demand No webcast; guidance suspended No public disclosure (private) Visibility reduced
Inventory/supply planningQ1 headwind from Easter/promo timing; plan to right-size inventory by end of Q2 Reported lower y/y sales; restructuring expenses for network consolidation No public disclosure (private) Stabilized post-Q2 per plan

Management Commentary

  • CEO (Q2 2025 press release): “We continue to make meaningful progress against our long-term strategic priorities, including our supply chain modernization initiative… Our team remains focused on executing our back half plans and creating the future as we work towards closing the merger with Ferrero” .
  • CFO (Q1 2025 prepared remarks): “Adjusted EBITDA for the first quarter was $72M, a 4% decrease versus the prior year… Gross margin for the first quarter was 29.4%, a 20-basis point increase versus the prior year” .
  • CEO (Q1 2025 prepared remarks): “We remain on track to deliver approximately 500 bps of margin expansion as we exit 2026” .

Q&A Highlights

  • Health/wellness demand shift: Management reiterated plans to activate nutrition-forward claims and product launches (e.g., Special K protein granola) to align with consumer trends .
  • Margin trajectory: CFO guided gross margin contraction in Q2 due to manufacturing rebalancing, aiming for stabilization in H2 2025 as inventories normalize .
  • Market share and promotion: Sequential improvement targeted via strategic investment reallocation toward consumer-facing activities and distribution gains; acknowledgment of competitive pressure from emerging brands .

Estimates Context

  • Q1 2026: S&P Global consensus for KLG is unavailable post-acquisition (company private; no estimates published) .
  • Q1 2025: Missed Street estimates; revenue $663M vs $679.5M consensus and EPS $0.20 vs $0.40 consensus, reflecting volume and consumption headwinds .

Key Takeaways for Investors

  • No Q1 2026 public earnings for KLG; exposure now flows through Ferrero, where cereal integration and investment plans are emphasized .
  • The last disclosed trajectory (Q1–Q2 2025) showed top-line pressure but ongoing structural margin initiatives; this supports medium-term margin expansion potential under Ferrero stewardship .
  • Health/wellness positioning and portfolio claims remain central to the brand strategy; monitor Ferrero’s activation and innovation cadence across cereal brands .
  • Pre-acquisition guidance suspension reduced near-term visibility; investors should follow Ferrero disclosures for performance updates of the cereal unit .
  • Cash discipline was tightening pre-close (FCF negative on elevated capex to stand up systems and supply chain); expect continued capex focus under Ferrero to complete network optimization .
  • Short-term trading implications for KLG no longer apply; for Ferrero-exposed instruments, the narrative hinges on execution of integration, margin delivery, and stabilization of category consumption trends .
  • Competitive dynamics in cereal (emerging brands gaining share) were clear in early 2025; watch how Ferrero leverages its scale and marketing to counter share losses and improve mix .