Food company Kellogg Co (K.N) trimmed its 2013 sales forecast on Thursday, citing weaker demand in the United States and the stronger dollar.
The maker of Corn Flakes cereal, Eggo waffles and Keebler cookies stood by its full-year earnings outlook, excluding the impact of currency and one-time items, despite reporting stronger-than-expected results for the second quarter.
Net income rose to $352 million, or 96 cents per share, in the quarter from $324 million, or 90 cents per share, a year earlier.
Excluding accounting adjustments and integration costs from the acquisition of snack maker Pringles, earnings were $1.00 per share. On that basis, analysts on average were expecting 97 cents, according to Thomson Reuters I/B/E/S.
Net sales rose 7 percent to $3.71 billion. Internal net sales, which strip away foreign exchange, acquisitions, dispositions and integration costs, fell 0.5 percent.
In North America, internal net sales fell 1.6 percent, hurt by declines of 3.3 percent for its morning foods and 3.2 percent for its snacks.
Cereal is a particularly competitive category in U.S. grocery stores, due in part to an ever-growing array of breakfast options, from yogurt to frozen egg sandwiches. Both Kellogg and its main cereal rival, General Mills (GIS.N), have recently launched breakfast drinks.
Kellogg said it expects full-year sales to rise 5 percent, down from a prior outlook for a 7 percent increase. It cited slower-than-expected growth in developed markets, particularly the United States, and the impact of the stronger U.S. dollar.
Kellogg has been working to cut costs to offset the impact of slowing sales. It stood by its forecast for full-year earnings per share of $3.84 to $3.93, excluding one-time items and currency fluctuations.
The company said it now expects currency fluctuations to take a 9 cent-per-share bite out of full-year earnings, much more than its previous estimate of 2 cents.
Kellogg shares were down 0.8 percent at $65.70 in early trading.
(Reporting by Martinne Geller in New York; Editing by Jeffrey Benkoe, Lisa Von Ahn and John Wallace)