(Reuters) -Pringles maker Kellanova missed market expectations for first-quarter net sales on Thursday, as consumer spending weakened in the company’s biggest market due to inflation.
President Donald Trump’s sweeping trade policy, which is expected to raise prices for Americans, has triggered economic uncertainty in the U.S.
Data showed on Wednesday that the economy contracted in the first quarter for the first time in three years.
Kellanova said it was “planning contingencies and taking action for managing through continued global economic uncertainty,” as spending is expected to be weak this year.
The company, which is in the process of being bought out by snacks giant Mars, has been raising prices across markets to offset the impact of higher input costs.
Rival Hershey also flagged tariffs-related expenses of about $15 million to $20 million in the current quarter.
Persistent weakness in the snacks and frozen foods categories led to a 4% fall in first-quarter sales in the United States, which accounts for about 51% of Kellanova’s total business.
The company’s sales in Europe and Latin America also fell on soft demand for cookies and beverages.
On an adjusted basis, Kellanova’s first-quarter gross margin fell to 34.9% from 35.7% a year ago.
Its net sales fell 3.7% to $3.08 billion in the three months ended March 29, compared with analysts’ expectation of $3.18 billion, according to data compiled by LSEG.
Its adjusted profit came in at 90 cents per share in the quarter, compared with market expectations of $1.01.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shinjini Ganguli)
