Cereal maker Kellogg Co. said its European sales fell more than 13 percent in the first quarter, as both retailers and shoppers reeling from the region’s financial crisis resisted its efforts to raise prices.
Kellogg gave more details Thursday about disappointing quarterly results, which led the maker of Corn Flakes, Mini-Wheats and Rice Krispies to cut its full-year outlook earlier this week.
Sales in Europe, which accounts for about 16 percent of the company’s overall revenue, fell 13.4 percent in the quarter.
Overall sales are expected to grow in the second quarter, but operating profit may decline even more sharply than the 6.5 percent fall it reported in the first quarter.
The company had said on Monday that it expected operating profit to fall 2 percent to 4 percent in 2012, from its previous forecast of flat to up slightly. It said 2012 sales should rise 2 percent to 3 percent, down from its the 4 percent to 5 percent growth it forecast earlier.
Kellogg, which competes with companies like General Mills and Kraft Foods, also said Thursday it lost roughly half a percentage point of market share in the North American cereal business in the first quarter.
Sales at its U.S. Morning Foods and Kashi business, which includes cereals and Kashi-branded snacks, fell 1.8 percent in the period, mainly on the price hikes.
The Battle Creek, Mich.-based company, which struck a deal to buy Pringles potato chips from Procter & Gamble in February for $2.7 billion, said it was on track to complete that transaction around the middle of the year.
For the first quarter, the company said net income was $358 million, or $1 per share, compared with a profit of $365 million, or $1 per share, a year ago.