CHICAGO — Kellanova capped off its first full fiscal year as a stand-alone company with a profit jump, even as sales finished on the downside for both the fiscal 2024 fourth quarter and year.

For the year ended Dec. 28, 2024, net income surged 41% to $1.34 billion, equal to $3.88 per share on the common stock, from $951 million, or $2.76 per share, a year earlier. Chicago-based Kellanova attributed the gain to higher operating profit and positive swings in mark-to-market impacts and one-time tax items. Adjusted net earnings per share were $3.86 ($3.92 on a currency-neutral basis) versus $3.23 per share in fiscal 2023. That topped Wall Street’s high-end forecast for 2024 adjusted EPS of $3.83.

Operating income climbed by 24% year over year to $1.87 billion from nearly $1.51 billion. Kellanova said the increase reflected a favorable swing in mark-to-market impacts, improved gross profit margin from productivity efforts and lessening supply chain costs, and the cycling of reimbursement for transition services provided to WK Kellogg Co, its sister company spun off from The Kellogg Co. in October 2023. Adjusted operating profit advanced to $1.9 billion ($1.96 billion currency-neutral) from $1.62 billion in the prior year.

Fourth-quarter net income swelled to $365 million, or $1.04 per share, from $27 million, or 8¢ per share, a year ago. Kellanova said the earnings jump stemmed from higher operating profit, increased other income and a positive swing in one-time tax items. Adjusted EPS was 91¢ for the quarter (93¢ currency-neutral), compared with 78¢ in the 2023 quarter. Analysts’ top-end estimate was for 2024 fourth-quarter adjusted EPS of 89¢.

Operating income in the quarter grew 62% year over year to $532 million from $328 million. On an adjusted basis, operating profit rose to $448 million ($470 currency-neutral) from $392 million.

“A more growth-oriented portfolio and solid execution by our entire organization once again contributed to stand-out quarterly performance, as we concluded our first full year as Kellanova,” said Steve Cahillane, chairman, president and chief executive officer. “Led by our strong emerging markets presence, we sustained better-than-expected top-line growth amidst challenging industry conditions, and we improved our profit margins faster than we had anticipated. We also embarked on an exciting next phase, as we prepare to combine with Mars.”

Kellanova said it wouldn’t be providing forward-looking guidance or holding its quarterly analyst call because of the pending acquisition by Mars.

Kellanova shareholders approved the deal in a special meeting on Nov. 1. Under the $35.9 billion agreement, unveiled in mid-August, Mars is slated to buy Kellanova for $83.50 per share in cash. Kellanova said the transaction is still expected to close within the 2025 first half, pending customary closing conditions and regulatory approvals. Plans call for Kellanova to be integrated into Mars Snacking, led by global president Andrew Clarke and based in Chicago. 

At the top line, Kellanova’s fiscal 2024 net sales fell 2.8% to $12.75 billion from $13.12 billion a year earlier. Kellanova cited “adverse foreign currency translation, the extended impact of elasticity on volume and the mid-2023 divestiture of its business in Russia” as behind the decrease, partially offset by a positive price/mix. Organically, net sales climbed 5.6% to $13.81 billion from $13.07 billion on a 6.7% gain in price/mix and a 1.1% dip in volume.

North American net sales for 2024 came in at $6.58 billion, up 0.1% from $6.57 billion for 2023. Organic net sales inched up 0.2% to nearly $6.59 billion on a 1% uptick in price/mix and a 0.8% decline in volume. Kellanova said the “positive impact of prior-year revenue growth management actions more than offset pressure on volume from prolonged industrywide demand softness.” Fourth-quarter sales for the region decreased 1.7% to $1.561 billion, with adjusted results down 1.5% to $1.564 billion on a 0.5% gain in volume and a 2% decline in price/mix.

By category, snack and frozen food sales in North America each edged up 0.1% for 2024 and were up 0.2% and 0.3%, respectively, on an organic basis, Kellanova said. In the fourth quarter, snack net sales fell 2.9% and were down 2.8% organically, while frozen saw gains of 4.7% in reported net sales and 5% in organic net sales.

Operating profit for North America rose 24% year over year to $1.27 billion in 2024 and was up 24.5% to $1.37 billion on an adjusted basis. Fourth-quarter operating income totaled $301 million, up 28%, and grew 8.4% to $324 million on an adjusted basis.