Shares of Kellogg Company K reached a new 52-week high of $73.60 on Dec 29, eventually closing at $73.51, owing to growth initiatives taken up by the company to revive sales. The cereals and convenience food company yielded a solid year-to-date return of 15.7%.
Growth Drivers
Kellogg’s shares gained momentum since past three quarters owing to growth initiatives taken up to drive sales growth.
In order to strengthen sales, the company invested in brand building, in-store capabilities as well as product and packaging innovation while reformulating many existing items. Moreover, cost savings from its re-structuring program, Project K, are funding renovation, innovation and brand support. Part of the savings is also being invested to improve its offerings. Additionally, the company plans to use some of the savings to increase manufacturing capacity and R&D resources in developing/emerging markets.
Further, Kellogg is geared to welcome 2016 with new products for its customers. Kellogg plans to launch 40 items in the beginning of 2016. These include Special K Nourish cereals, containing wholesome, tasty ingredients such as cranberries, almonds, coconut and granola. It will also bring new Mini-Wheat cereal in two varieties — Cranberry with Yogurt Drizzle and Blueberry. The company will also introduce a cereal/nut breakfast mix — single-serving pouches to be eaten without milk — and several other breakfast foods.
It will launch five flavors of the Pringles snacks and more varieties of Cheez-It. Additionally, frozen foods will be added under the Eggo and MorningStar Farms brands. These new offerings should drive sales in 2016 for the Zacks Rank #3 (Hold) company.
Stocks to Consider
Investors interested in the consumer staple sector may consider stocks like Boulder Brands, Inc. BDBD, Campbell Soup Company CPB and Omega Protein Corporation OME. All the stocks sport a Zacks Rank #1 (Strong Buy).
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