Cereal and snacking giant Kellogg (K) has increased sales for the first time in more than two years as its cost-cutting strategy and expansion into healthier foods showed signs of beginning to work.

Shares in New York leapt 6% to $62.43 in early trading – although the stock is still more than 15% down for the year – as the hike in third-quarter revenues surprised analysts who had been expecting a further decline.

Reported net sales nudged up 0.6% to $3.3bn in the three months ended 30 September thanks to $430m acquisition of Brazilian biscuits, pasta and powdered beverages maker Parati Group in October 2016.

Favourable currency translation also helped the US group, as well as the return to promotional activity and growth for Pringles in Europe, growth in frozen foods and improvement in Special K’s global performance.

Reported operating profits also increased 13.1% to $464m as margins improved by 1.6 percentage points. Kellogg’s Project K cost saving programme helped drive down selling and general costs to to $768m in the quarter, with additional benefits coming from changing its direct store delivery (DSD) system in the US snacks division. The company has lowered expenses by using a warehouse model rather than distributing directly to stores.

Kellogg has struggled in recent years – alongside its global consumer goods peers – as it was slow to react to changing consumer tastes. The group has also suffered as shoppers turned away from traditional breakfast cereals for healthier on-the-go options or just skipped the meal altogether.

Sales have fallen for the past nine successive quarters at the business, with CEO John Bryant announcing last month that he was standing down after seven years in charge to be replaced by former Coca-Cola and Ab InBev executive Steven Cahillane.

“Our third quarter played out as expected,” said Bryant, who remains as chairman before leaving Kellogg in March.

“There was some timing benefit that comes out of the fourth quarter, but these results put us solidly on track to deliver on our full year 2017 financial guidance, just as we welcome Steve Cahillane as the 11th chief executive officer in our company’s history.”

Sales in Europe rose 0.8% to $599m in the quarter thanks to the strength of the euro and dollar versus sterling, a return to growth for Pringles and continued stabilisation in cereal consumption in the UK, which has seen heavy falls in the past two years.

Total North American sales fell 1.6% to $2.2bn for the period, with US morning foods, which includes cereal, down 3% to $710m and US snacks down 4.5% to $760m.

Group revenues declined 0.8% on a constant currency basis for the quarter, with sales down 2% for the first nine months of the year to $9.7bn.

“I am honoured and excited to be part of this great company,” new CEO Steve Cahillane added. “In a few weeks, I have already confirmed everything that attracted me to the company: iconic brands, outstanding food, a special culture, and a will to win. The third quarter results and 2017 financial outlook are a testament to the strategy in place, as is the acquisition of RXBAR, which will serve as an additional platform for growth.

“We are encouraged that we remain on track to deliver on our 2017 financial guidance, even amidst challenging industry conditions. Going forward, strong productivity programs give us good visibility into cost savings, and we will continue to transform and drive this business back to top-line growth.”

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