Stocks of both former-Kellogg Kellanova and new WK Kellogg drop on first day after separation completed

By Tomi KilgoreCiara Linnane

Kellanova, formerly known as Kellogg Co., limped out of the gate Monday while WK Kellogg Co. was flat, as the two stocks spun out of the former Kellogg started trading on their first day after separating into two independent public companies.

Kellanova (K) houses the company's snacks, frozen foods and international cereals company, while WK Kellogg (KLG) is home to the North America cereals business. The former has retained the Kellogg ticker "K," while the latter is trading under the symbol "KLG." The separation is aimed at creating greater shareholder value and focus on each company's area of focus.

"As a stand-alone company, Kellanova will benefit from greater operational focus and fit-for-purpose strategy and resource allocation, investing behind its differentiated brands in an effort to deliver consistently strong net sales and earnings growth over time," said Kellanova Chief Executive Steve Cahilane.

Kellanova is expected to generate sales of about $13.4 billion to $13.6 billion in 2024 and adjusted per-share earnings of $3.55 to $3.65. About 60% of its 2022 sales came from snacks, including Pringles, Cheez-It, Pop-Tarts, Rice Krispies Treats, and more, the company has said.

International cereal accounted for about 20% of 2022 sales, while noodles and other account for just over 10%. Frozen foods accounted for the remaining just under 10%.

WK Kellogg is expected to generate sales of $2.7 billion in 2024.

Kellanova's stock was last down 11.7%, while WK Kellogg was up 0.1%.

The stocks' declines come as the S&P 500 ticked up 0.2%.

-Tomi Kilgore -Ciara Linnane

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10-02-23 1139ET

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