12:04 PM EDT, 05/06/2025 (MT Newswires) -- WK Kellogg (KLG) on Tuesday lowered its full-year guidance to take into account the potential impact of tariffs, as the cereal maker's fiscal first-quarter results declined year on year.

The company behind Frosted Flakes now expects 2025 organic net sales to fall about 2% to 3%, compared with the prior outlook of a 1% decline. Analysts polled by FactSet are looking for overall sales to be flat year on year at $2.71 billion.

WK Kellogg is projecting adjusted earnings before interest, taxes, depreciation, and amortization to be flat to down 2% this year versus its previous guidance that called for a 4% to 6% increase. The consensus is for EBITDA to rise to $290 million from last year's $275 million.

The company's shares were down 3.8% intraday.

"Our 2025 financial outlook now includes a modest impact from tariffs, primarily related to the sourcing of raw materials outside of North America, and assumes that most of our production remains exempt from tariffs on imports from and exports to Canada and Mexico," the company said in a statement. "However, there can be no assurance that this suspension will remain in place indefinitely or whether any new or expanded tariffs may further impact our business and results of operations."

Last month, US President Donald Trump announced new tariffs on imports, including from China, but later declared a 90-day pause on certain duties for non-retaliating countries. Washington and Beijing have since been in a deadlock over tariffs.

For the quarter ended March 29, earnings per share fell to $0.20 from $0.37 a year earlier. Net sales dropped 6.2% year on year to $663 million, while organic revenue fell 5.6% at $667 million. Four analysts in a FactSet survey projected organic sales of $679.1 million.

The company attributed the drop in organic sales to lower retailer inventory due to the timing of the Easter holiday and "the lapping of a large retailer promotion," as well as weaker-than-expected consumption trends.

"Despite the lower-than-expected first-quarter performance which resulted in revising our 2025 outlook, we

continue to make great progress on our strategic priorities, including the supply chain modernization initiative," Chief Executive Gary Pilnick said. "We remain on track to deliver (about 500 basis points) of margin improvement as we exit 2026."

Price: 16.85, Change: -0.51, Percent Change: -2.94