Cereal company Kellogg raised its annual sales and profit forecast Thursday, anticipating higher profits from people eating more cereal at home during the pandemic and related shutdowns.
Kellogg’s shares rose as much as 2.6 percent in the morning to hit a more than 21-month high after it reported its second quarter results, according to Reuters.
The company’s overall organic net sales in North America rose 11 percent in the second quarter, as schools were shut down and many people shifted to work-from-home as part of efforts to mitigate the spread of the coronavirus.
The shutdowns led to a surge in demand for Kellogg’s products, such as Corn Flakes, Froot Loops and Eggo waffles.
“Amidst the COVID-19 crisis, demand for packaged foods for at-home consumption remained elevated for longer than anticipated. This drove higher sales of the Company’s products in retail channels, more than offsetting a related decline in foods sold in away-from-home channels,” the company said in its earnings release.
The company warned, however, that cereal demand may not stay at elevated levels and net sales growth would likely slow in the second half of the year.
“What I’d say about cereal consumption- It’s been pretty choppy. We’re just going to have to continue to take a wait-and-see approach,” CEO Steve Cahillane said, according to Reuters.