雅虎香港財經 Kellogg stock slides as iconic company breaks up
Kellogg (K) has officially split its bowl in two.
The iconic 117-year-old maker of Pringles and Frosted Flakes split into two companies today after working since June 2022 on the separation.
Kellanova will house well-known snack brands such as Pringles, Cheez-It, and Pop-Tarts as well as the company's plant-based food business Morningstar.
The Kellanova business, which now former Kellogg CEO Steve Cahillane will run, trades under Kellogg's prior stock ticker symbol, "K", on the New York Stock Exchange.
Kellogg says the Kellanova name is meant to tie back to the heritage of the company while also signaling a new era of growth in a still-surging snacks industry.
Shares of Kellanova fell 7% on the session.
The traditional cereal business, which boasts names such as Froot Loops and Corn Flakes, is called WK Kellogg Co — a nod to the company's founder William Keith Kellogg.
The business's stock symbol, "KLG", will also trade on the New York Stock Exchange.
Shares dropped 9% on the session.
At the time of the breakup announcement in 2022, Cahillane told Yahoo Finance Live the decision reflected his view that the market wasn't properly valuing Kellogg's fast-growing snacks business and efforts to streamline costs.
He reiterated that view in a new chat today (video above).
Cahillane also led another transformation transaction as CEO: selling Kellogg's Keebler cookie business in 2019.
Wall Street is taking a wait-and-see approach on both businesses, despite a generally well-received investor day several weeks ago.
For Kellanova, pros told Yahoo Finance that the business needs to jumpstart sales growth in its key lines of business. Moreover, the company has work to do to improve international exposure.
"While management guided to +3-5% long-term organic growth at the investor day, from our perspective there could be potential risk to that in the near term given North America still accounts for ~50% of pro-forma Kellanova revenues and year to date U.S. tracked channel retail volumes are down ~9%, a pace that has sustained in recent months," Jefferies analyst Rob Dickerson wrote in a client note.
Added Dickerson: "With much higher prices relative to two years ago, slowing price benefits, and a strapped U.S. consumer, we think it puts pressure on the company to reinvest to stimulate growth."
As for WK Kellogg Co, the vibe on the Street is that the company must improve margins by cutting costs in a slow-growing cereal industry.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
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