Kellanova Earnings: Profit Gains Stand to Buoy Judicious Brand Spending; Shares Still a Bargain

Narrow-moat Kellanova’s competitive prowess was on display in its first three months as an independent organization—following the split from no-moat WK Kellogg in October. In the quarter, organic sales jumped 6.9% (as an 8% price increase was only partially offset by a 1% downdraft in volume), while the adjusted gross margin expanded 290 basis points to 33.9% and adjusted operating margin shot up 270 basis points to 12.3% (on the heels of price bumps and culled inefficiencies).