Kellogg CEO John Bryant said today (5 May) said the US cereal and snacks group had made “good progress on our priorities” in the first quarter, a period when underlying net sales and profits rose.

However, the Special K maker’s net sales fell more than analysts had expected in the quarter to 2 April. Kellogg’s underlying earnings per share beat expectations.

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Shares in Kellogg were down at the time of writing.

Kellogg booked currency-neutral comparable net sales of US$3.8bn for the quarter to 2 April, up 6.6% on the first three months to 2015, helped by inflation-related sales growth in Venezuela. The currency-neutral comparable figures exclude the impact of changes in exchange rates and other factors including Kellogg’s Project K cost reduction initiatives and mark-to-market accounting for pensions.

The group’s reported net sales fell 4.5% to US$3.4bn. According to a Thomson Reuters poll, analysts on an average had net sales to hit US$3.47bn. Kellogg pointed to the effect of currency translation after the re-measurement of its Venezuelan business last year. Kellogg’s lengthy set of numbers also included a 1% dip in currency-neutral comparable net sales excluding the impact of Venezuela.

The company’s North American business saw its net sales fall 1.5% on a reported basis. On a currency-neutral comparable basis, net sales in North America were down 1.2%. Using that metric and looking at net sales from Kellogg’s US morning foods unit, the company filed a 1.2% decline year-on-year. However, Kellogg said its namesake-branded cereals gained 20 basis points of market share.

Internationally, Kellogg’s reported net sales decreased by 1.6% in Europe. Currency-neutral comparable net sales decreased by 0.9%. In Latin America, on a reported basis net sales fell 34.9%. However, currency-neutral comparable net sales jumped 90.3%, boosted by a better-than-expected performance from Kellogg’s business in Venezuela. Excluding its operations in Venezuela, currency-neutral comparable net sales fell 2%.  

Reported net sales in Asia Pacific decreased by 5.8%. However, currency-neutral comparable net sales increased by 0.9%.

Currency-neutral comparable operating profit was up 34.9% at US$711m. Currency-neutral comparable net income stood at US$473m, an increase of 34.5% year-on-year.

“We have made good progress on our priorities:  We have continued to improve our food; we’ve continued to expand the Pringles business; we’ve enhanced our sales capabilities; productivity initiatives continue to provide earnings visibility; and continue to feel momentum building,” Bryant, Kellogg’s chairman and CEO, said.  “The actions we are taking are having an impact and we remain confident that they will drive continued improvement as this year progresses, and into 2017.”

Shares in Kellogg were down 2% at US$75.48 at 10:53 ET.