Executive Summary
Kellanova delivered a steady QQ2 2025 with revenue of USD 3.203 billion, a 0.9% YoY decrease and a 3.9% QoQ rise. Gross profit reached USD 1.111 billion for a gross margin of 34.7%, while operating income stood at USD 465 million (operating margin 14.5%). Net income was USD 299 million and earnings per share (EPS) of USD 0.86 (diluted USD 0.85). The quarter reflects continued mix resilience and disciplined cost management, but profitability improvements are tempered by leverage and liquidity pressures. Cash flow generation remained positive but modest: CFO USD 169 million, capex USD 148 million, yielding free cash flow of USD 21 million; dividends of USD 198 million were paid, and financing activities contributed USD 32 million in net cash. The balance sheet shows total assets of USD 15.871 billion against total liabilities of USD 11.661 billion and total equity of USD 4.109 billion, with cash and cash equivalents of USD 354 million and net debt around USD 6.13 billion. Liquidity metrics are challenged (current ratio 0.68; quick ratio 0.45), underscoring balance sheet durability concerns if operating headwinds persist. Relative valuation remains attractive on an earnings basis (P/E ~23x) but high price-to-free-cash-flow and a heavy debt burden necessitate a cautious stance.
Key takeaway for investors: Kellanova exhibits resilient topline performance and credible margin retention in a volatile input-cost environment, but the combination of sub-1x liquidity ratios and elevated net debt requires close monitoring of cash conversion, debt management, and potential strategic portfolio actions. Absent a formal forward guidance, the horizon hinges on commodity cost trajectories, pricing/mix discipline, and capital allocation that prioritizes deleveraging alongside sustaining shareholder returns.
Key Performance Indicators
QoQ: -1.64% | YoY:-18.53%
QoQ: -2.12% | YoY:-19.63%
Key Insights
Revenue: USD 3.203B in Q2 2025; YoY change -0.93%; QoQ change +3.89%
Gross Profit: USD 1.111B; Gross Margin: 34.69%
EBITDA: USD 551M; EBITDA Margin: 17.20%
Operating Income: USD 465M; Operating Margin: 14.52%
Net Income: USD 299M; Net Margin: 9.33%
EPS: USD 0.86; Diluted EPS: USD 0.85
Cash Flow: CFO USD 169M; Capex USD -148M; Free Cash Flow USD 21M
Balance Sheet: Total Assets USD 15.871B; Total Liabilities USD 11.661B; Total Equity USD 4.109B
Liquidity: Cash USD 354M; Current Ratio 0.68; Quick R...
Financial Highlights
Revenue: USD 3.203B in Q2 2025; YoY change -0.93%; QoQ change +3.89%
Gross Profit: USD 1.111B; Gross Margin: 34.69%
EBITDA: USD 551M; EBITDA Margin: 17.20%
Operating Income: USD 465M; Operating Margin: 14.52%
Net Income: USD 299M; Net Margin: 9.33%
EPS: USD 0.86; Diluted EPS: USD 0.85
Cash Flow: CFO USD 169M; Capex USD -148M; Free Cash Flow USD 21M
Balance Sheet: Total Assets USD 15.871B; Total Liabilities USD 11.661B; Total Equity USD 4.109B
Liquidity: Cash USD 354M; Current Ratio 0.68; Quick Ratio 0.45; Cash Ratio 0.066
Leverage & Coverage: Net Debt USD 6.13B; Debt to Capitalization 0.612; Interest Coverage 6.12x; ROE 7.28%; ROA 1.88%; ROCE 4.43%
Valuation & Efficiency: P/E 22.92x; P/B 6.67x; P/S 8.56x; EV/EBITDA 60.88x; Dividend Yield 0.72%
Operating Cycle: DSO 47.71 days; DIO 54.03 days; DPO 94.86 days; CCC 6.88 days
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.20B |
-0.93% |
3.89% |
| Gross Profit |
1.11B |
-5.69% |
4.52% |
| Operating Income |
465.00M |
1.09% |
12.59% |
| Net Income |
299.00M |
-18.53% |
-1.64% |
| EPS |
0.86 |
-19.63% |
-2.12% |
Key Financial Ratios
operatingProfitMargin
14.5%
operatingCashFlowPerShare
$0.49
freeCashFlowPerShare
$0.06
dividendPayoutRatio
66.2%
Management Commentary
Note: The earnings transcript data provided for QQ2 2025 is not available in the dataset. As a result, management-specific cadence, tone, and forward-looking commentary could not be incorporated. Should a transcript become available, the highlights would be organized by themes (strategy, operations, market conditions) with direct quotes and context.
Forward Guidance
No formal forward guidance is provided in the QQ2 2025 data. Inference suggests that near-term performance will likely hinge on three levers: (1) pricing/mix actions to sustain gross margins in a volatile commodity environment, (2) continued cost discipline and SG&A optimization to protect margins given a lean operating margin trajectory, and (3) capital allocation focused on deleveraging while maintaining shareholder returns. Industry dynamics in the consumer snacks space remain favorable for brand-led growth through perceived value, product innovation, and channel expansion (including e-commerce). Investors should monitor: input cost trends, currency headwinds, price realization success, working capital efficiency, capex discipline, and any announced portfolio actions that could affect debt levels or cash flow (e.g., asset divestitures or acquisitions).