Kellogg Co posted its sixth straight quarter of weaker net sales in its U.S. cereal business as demand for products such as Corn Flakes and Rice Krispies wane in its biggest market.
The company also said sales in its U.S. snack business dropped by the most in seven quarters, highlighting how processed food makers such as Kellogg, ConAgra Foods Inc and General Mills Inc are struggling to compete against healthier foods and cheaper private-label brands.
Kellogg's shares fell 2.4 percent to $61 in light premarket trading on Thursday.
"Our international business did well in the quarter, although we continued to face the challenges in developed regions and categories that we've seen all year," Chief Executive John Bryant said in a statement.
Kellogg, as well as being the world's biggest breakfast cereal maker, also makes snacks such as Nutri-Grain cereal bars and Special K Cracker Chips.
Internal net sales in the company's U.S. cereal business fell 4.7 percent. Internal net sales exclude the impact of acquisitions, divestitures, integration costs and impact of foreign currency translation.
Sales in the snack business on the same basis fell 4.2 percent.
The U.S. cereal and snacks businesses each contributed about 23 percent of total sales in the third quarter ended Sept. 27.
Net income attributable to Kellogg fell to $224 million, or 62 cents per share, from $326 million, or 90 cents per share, a year earlier.
Excluding items, the company earned 94 cents per share.
Net sales fell 2.1 percent to $3.64 billion.
Analysts on average had expected earnings of 92 cents per share on revenue of $3.69 billion, according to Thomson Reuters I/B/E/S.
Up to Wednesday's close, Kellogg's shares had risen 2.3 percent since the start of the year. (Reporting by Sruthi Ramakrishnan in Bangalore,)