UPDATE 1-Kellogg's quarterly profit beats on lower costs

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Aug 3 (Reuters) - Kellogg Co reported a higher-than-expected quarterly profit as the cornflakes maker doubles down on cost-cutting measures, including overhauling the distribution model for its U.S. snacks business.

Kellogg said in February that it would stop distributing snacks products such as Cheez-It crackers and Pringles chips in the United States directly to stores, and switch to its more widely used warehouse model to cut costs.

Sales in the company's U.S. snacks business - its biggest -remained flat in the second quarter ended July 1, Kellogg said on Thursday.

Revenue from Kellogg's U.S. morning foods unit, which includes cereals, fell 6.6 percent.

However, cost of goods fell about 4 percent, and selling and other expenses dipped 1.1 percent as the company cut expenses through a multi-year program involving job reductions and optimization of production.

Net income attributable to Kellogg rose marginally to $282 million, or 80 cents per share, in the quarter, from $280 million, or 79 cents per share, a year earlier. (http://bit.ly/2wouU9J)

Excluding items, the company earned 97 cents per share, beating the average analyst estimate of 92 cents, according to Thomson Reuters I/B/E/S.

Net sales fell to $3.19 billion from $3.27 billion a year earlier, but beat the average analyst estimate of $3.16 billion.

The company's quarterly sales have declined for more than two years, as consumers opt for healthier options over Kellogg's processed food offerings. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Supriya Kurane and Martina D'Couto)