Shares of WK Kellogg Co. (KLG) plummeted 13.59% in pre-market trading on Tuesday following the release of disappointing first-quarter results and a significant downward revision of its full-year outlook. The cereal giant's performance fell short of analyst expectations, sparking concerns among investors about the company's growth prospects and the impact of potential tariffs.

WK Kellogg reported first-quarter sales of $663 million, down 6.2% year-over-year and missing the analyst consensus estimate of $679.5 million. Earnings per share came in at $0.20, significantly below the expected $0.34. The company cited weaker-than-expected consumption trends and reduced retailer inventory as key factors behind the underwhelming performance. Additionally, WK Kellogg announced a cut to its 2025 organic net sales growth guidance, now projecting a decline of 2.0% to 3.0%, compared to the previous forecast of a 1% decline.

Adding to investor concerns, the company revealed that its 2025 financial outlook now includes a modest impact from tariffs, primarily related to sourcing raw materials outside of North America. While WK Kellogg stated that it assumes most of its production remains exempt from tariffs on imports from and exports to Canada and Mexico, the uncertainty surrounding future trade policies has clearly rattled the market. Despite these challenges, the company maintains it is on track to deliver about 500 basis points of margin improvement as it exits 2026, offering a glimmer of hope for long-term recovery.