Yahoo Finance Live’s Brian Sozzi breaks down 3 takeaways from Kellogg’s earnings.

Video Transcript

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- Welcome back, everyone. People are snacking more, and some companies are benefiting. Kellogg handedly beat earnings and revenue estimates, and raised its forecasts for 2022 as demand for snacking went through the roof. But Sozzi says the shortage for cereal is still real, and that's where we start Sozzi's Takes today. All right. Give us the scoop, the snack.

BRIAN SOZZI: Yeah. Kellogg, they caught my attention yesterday. I saw that stock up in a down market. Seeing that continue here today, it was just interesting to look through their quarter now. It wasn't a gangbusters quarter on the top and bottom lines. You had sales up 1% in their key North America division. Operating profits up-- down 11%. So inflation's still hitting the company, but there were a couple of good things in there. I am popping out a Kellogg's box.

- It's like the toy. That's like the secret toy that you get in the bottom of a box of cereal-- it's Sozzi.

- Open your box, you may find me. And a couple of my takeaways from Kellogg's quarter here. First, the cereal shortage is in fact real. I talked to Kellogg's CEO Steve Cahillane. Still dealing with supply shortages there. My sense was things are starting to improve. And then of course, that is good, because it's a key driver of their North American business. Next up, snacking-- like you mentioned, Brad-- is on fire here in the US, as people become more mobile.

Of course, we all heard that yesterday from the Hostess Brands CEO Andy Callahan. But also overseas. Fun fact, Pringles sales in the UK, up 12%. So there's a little bit of news you can use, and then tweet about it. And last but not least, inflation. Inflation continues to pressure this company. Cahillane, really, I think suggested to me that they're going to be taking more price increases to offset this inflation.

But again, you can't go gangbusters here on inflation because you are in a competitive market with snacks and cereal. And speaking of inflation, I put that question to friend of the show, Bill Newlands, the CEO of Constellation Brands, on if he sees peak inflation. Take a listen.

BILL NEWLANDS: It's going to be wide ranging this year. I think it depends to some degree on how much you're hedged. We're hedged a lot, and more than we normally would be, which I think will help. But it's not clear that we have hit the peak just yet. I mean, we think it's going to be high inflationary pressures throughout our fiscal year.