What happened

Shares of cereal and snack giant Kellogg (K -1.34%) trailed the market last month, losing 10% compared to a 9% slump in the S&P 500, according to data provided by S&P Global Market Intelligence.

The drop ensured that shareholders lost to the market over the year, as the stock shed 16% compared to a 6% drop in the S&P.

Two children at a kitchen island eating cereal

Image source: Getty Images.

So what

Kellogg had a busy month, with new product introductions in key franchises like Cheez-It, Pringles, and Rice Krispies. However, investors were more focused on the company's strategic pivot, and whether the shift will produce better growth results. Kellogg announced in mid-November that it is looking to sell its cookies and fruit snacks businesses as part of a portfolio reboot.

Management is hoping these changes will help the company return to growth, especially in the U.S., where organic sales are down in both the snack and breakfast segments over the past nine months.

Now what

Kellogg is expecting to post a slight fourth-quarter revenue boost when it announces results on Feb. 7. Consistent with the prior quarter's trends, that increase should come with reduced profitability as the company struggles to pass along higher costs. Executives say they're optimistic about Kellogg's longer-term growth prospects, and they're making smart moves to focus the portfolio on the most attractive snack and cereal niches. Yet the stock isn't likely to break out of its current funk until the company can show consistent organic sales gains.

Check out the latest Kellogg earnings call transcript.