Kellogg Co's sales fell more than expected in the first-quarter as demand stayed sluggish in the United States, and the company said full-year sales would be hurt by the lingering effects of a sales force rejig aimed at reviving growth.
Kellogg's sales have fallen for five quarters in a row now as the cereal and snacks maker, like its peers, struggles to adapt to the increasing preference for healthier foods over sugary and processed products.
The company, in the latest quarter, overhauled its sales force for its U.S. snacks business - its largest and one that houses Cheez-It crackers and Pringles chips - by changing employees' roles, managers and zones to spark growth.
But, the disruptive reorganization led to a 2.6 percent drop in sales at the snacks business in the quarter and is expected to hurt the current quarter as well.
Even Kellogg's wholesome snack offerings, such as Rice Krispies Squares, failed to notch sales growth.
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"The business remains our biggest challenge in snacks," said Paul Norman, head of North America.
While higher prices are benefiting Kellogg in Venezuela, the sales force rejig, weakness in Europe and Latin America, and frozen food product transitions will hurt sales, said CFO Ron Dissinger, who will retire at the end of 2016.
The weak sales and the impending retirement of the company's CFO of six years pushed Kellogg's shares down 2 percent to $75.55.
